Rich review emigration options as cash-for-citizenship doors close
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WITHIN less than one year, two popular immigration destinations of the richest Chinese have closed their “money for citizenship” doors. Since so many of China’s wealthy come from Shanghai, the changes are bound to affect some of the city’s most affluent residents.
The Hong Kong government last week announced the suspension of its Capital Investment Entrant Scheme, saying it wanted to focus its immigration policy on migrants with skills, not just money, to bring to the city. The Canadian government shuttered a similar program last April.
Hilary Lu, a 40-year-old mother from Shanghai, said she “bought” her family permanent residency in Hong Kong through the investor visa program in 2010. She said she understands why Hong Kong officials rescinded it.
“We have a company in Hong Kong, where we employ locals, but most people who have benefited from this scheme contribute nothing other than investing in real estate or stocks,” she said.
Ninety percent of the 24,481 successful applicants under the Hong Kong program in the past 11 years came from the Chinese mainland. The program brought in HK$206 billion (US$600 million) as of last September 30, according to the Hong Kong Immigration Department. There is no breakout of Shanghai residents in the figures.
“Most of the applicants from the mainland were rich investors who were interested in Hong Kong financial markets because their investment channels back home were limited,” said Wang Lili, a co-founder and senior immigration consultant at Greenway Visa.
Pan Xingming, a professor specializing in immigration at Shanghai’s East China Normal University, said the decision reflects problems in the program.
“Hong Kong seems to have decided that competitiveness in its economy requires skilled migrants who do create concrete business rather than just feed in money,” he said.
Wasn’t delivering
Meanwhile, once immigrant-friendly Canada ended its 28-year-old investor visa program last year, after studies showed it wasn’t delivering the expected benefits to the economy.
“It’s estimated that investor visa holders in the past 20 years paid, on average, C$200,000 (US$162,648) less in taxes than other immigrants, simply because they rarely did business in Canada,” Guy Saint-Jacques, Canadian ambassador to China, said in an interview with Sanlian Life Week last March.
He said half the money brought in under the investor visa program didn’t translate into production or employment.
Immigration consultants agree that the suspended policies aren’t likely to be reinstated any time soon. Yet, killing off those policies permanently might lead to unwanted repercussions, experts said.
Wu Qianjin, a researcher on immigration at the Shanghai Academy of Social Sciences, said investors may contribute more than just upfront money if they remain in a foreign country long enough.
“Those investors could act as business links between their adopted home and their motherland, and children educated there might be fruitful economic producers in the future,” Wu said.
Wu said she doesn’t believe scrapping the overseas programs will dent the migration flows of the wealthy very much. There are always other doors, like moving to live with children who have gone overseas to study and stayed on to work in overseas countries and regions.
Qiu Linhua, a consultant with the immigration agency affiliated to Shanghai International Studies University, said consultants have been alerting potential Chinese applicants about an across-the-board tightening in investor visa programs for years.
“We expect our clients are prepared for these changes and haven’t put all their eggs in one basket,” Qiu said.
A 40-year-old Shanghai businessman surnamed Yang said he is currently on the waiting list for the EB-5 investor visa in the US after an failed attempt at securing an investor visa in Canada.
“I was a bit disappointed when Canada canceled its program because Canada was my first choice,” Yang said.
“However, I am happy that my application on the US side of the border seems to be going smoothly.”
Exploding demand
Last year, Chinese applicants under the EB-5 investor visa were estimated to have accounted for 85 percent of funds generated by the program. Also, for the first time in its 24-year history, the annual quota of 10,000 visas was exhausted.
In 2006, by contrast, only 16 investor visas went to Chinese immigrants, who were required to invest at least US$500,000 in a US business, according to the State Department.
“With exploding demand and a recovery in its economy, the US is likely to lift the threshold if it renews the program this September,” Henry Global Consulting Group, a Chinese immigration agency, wrote in a recent assessment.
The US, Canada, Australia and New Zealand remain the most popular immigration destinations for all Chinese, according to the 2014 annual report on Chinese migration released by the Center for China and Globalization, a Chinese think tank.
The report said an estimated 9.3 million Chinese residents had emigrated by the end of 2013.
It gave no number for those who emigrated on investor visas.
Moreover, some southern European countries suffering from hard economic times have been taking in an increasing number of Chinese immigrants under various investor visa programs.
Britain, where the Chinese became the largest immigrant group in 2012, doubled the minimum investment required for its Tier 1 investor visa to 2 million pounds (US$3.03 million) last year.
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