LONDON, ENGLAND, January 18, 2019 — For many, upon hearing the word 'immigration,' what comes to mind is often a phenomenon mired in controversy, one further fueled by populist politicians. With regards to investor immigration, such attitudes also frequently arise. This article clarifies the less-debated topic of governments' realistic views on investor immigration.
Put simply, investor immigration is the immigration of persons who invest into the countries to which they travel. This is a considerable investment, usually starting at US$ 100,000-150,000, plus due diligence, processing, and professional fees. Able to afford such an investment, the typical immigrant-investor is an affluent individual who owns and runs their own business(es). S/he likely has high personal expenses and often has a family for whom they have built a life. Investor immigration is generally considered desirable by countries, governments, and businesses worldwide. The reasons for this center around a key principle of investor immigration: the money they bring to the receiving country.
One way immigrant-investors bring additional capital expenditure to the receiving economy is through work. Immigrant-investors almost always hold a high-level role in their organisation(s). Indeed, if they have travelled to the country for business reasons, they are likely to create new jobs through entrepreneurial ventures and industry investment. As well as contributing to the countries they visit, this contribution to employment rates is good news for governments.
Another way is the typical expensive lifestyle of the immigrant-investor. This includes expenditure in the areas of leisure, retail, business, health, and education. These frequently constitute reasons for visiting the country in the first place. Business expansion is a common driver of investor immigration, as are educational and medical tourism. In utilising these services immigrant-investors are likely to go private, therefore aiding the private healthcare sector, as well as the education sector through non-subsidised fees. This balances out the frequent financial shortcomings of these sectors, which therefore ultimately makes education and healthcare more affordable for the native citizen.
Another, perhaps less well recognised, addition to a country is the cultural enrichment immigration brings. Some people argue that immigration can negatively affect native cultures, but this overlooks the fact that, in a cosmopolitan world, diversity and immigration can enrich a country without that country losing its sense of national value. Indeed, investor immigrants – ever the cosmopolitans – tend to be curious about the cultures of the countries they visit – a necessary pre-requisite for those doing business pan-culturally. Being respectful and mindful of the host culture is often what makes deals happen.
Ultimately, the investments made by the entrepreneur are probably the most obvious, and arguably most important, benefit brought to a country and its people. With regards to investor immigration programmes specifically, the investment typically goes directly into a government fund. These funds are then used to improve the quality of life of the countries' inhabitants, for example, by improving national education, housing, and infrastructure. A prime example of this is the Commonwealth of Dominica, an island state in the West Indies. Financed entirely by its investor immigration scheme, namely the Dominica Citizenship by Investment Programme, the country is building 340 housing units for families left homeless by Storm Erika. By November last year, almost half of these units had been successfully constructed. Citizens of St Kitts and Nevis, a twin-island nation in the West Indies, equally gain from investor immigration. There, the investor immigration scheme, the St Kitts and Nevis Citizenship by Investment Programme, the oldest programme in the industry, has enabled the introduction of a Poverty Alleviation Programme and the provision of a 'double salary' for government workers. This double salary has been enjoyed by citizens for the past three years, thanks to the success of St Kitts and Nevis' Programme.
It is not just these two nations who seek investor immigration for the benefit of their people. The Caribbean is known for its leading role in the citizenship by investment industry, and Antigua and Barbuda, Grenada, and St Lucia too operate citizenship by investment programmes. Worldwide, there are 12 programmes. Residence by investment, a scheme where residence is granted in return for investment, is also popular. Such programmes are currently offered by over seven European countries, including Austria, Greece, Italy, Malta, Portugal, Spain, and the United Kingdom, and the United States. The United Kingdom's scheme, the Tier 1 Investor Visa, has become increasingly popular in recent years. Tourism overall has brought immeasurable economic benefits to the country. For example, in 2018, London received 34.4 million visitors and tourism receipts totaling US$ 45.5 billion. Edinburgh, where it is thought that approximately 35,000 jobs are supported by the tourism industry, received almost US$ 2 billion. As regards the United States, in its bid to attract immigrant-investors, the nation has gone a step further, offering two residence by investment schemes. From these, the EB-5 Investor Visa and the E-2 Non-Immigrant Visa, the US receives even greater economic benefits.
Overall, it is clear from the growing number of programmes that countries and governments throughout the world see the benefits of investor immigration. Whilst public debate often surrounds security and due diligence, that is in fact what differentiates investor immigration programmes, whether citizenship or residency programmes. Some countries – particularly those more developed – turn a blind eye to the importance of due diligence. Yet smaller countries – whose economies depend more on these financial inflows – have a vested interest to make sure the integrity of their programme remains intact. For economies worldwide to continue benefitting from the resulting investment, more should be done to ensure that investor immigration programmes include strong due diligence frameworks that protect both native citizens and the reputation of fellow immigrant-investors.
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