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IM Yearbook 2019/20

Born from the need for a global, credible, “go-to” publication, the 2nd IM Yearbook offers valuable access to a prime target audience of top industry influencers, decision makers, and the foremost referral network to the world’s most influential Investment Migration programmes: Government officials such as Heads of CIU’s, policy makers, academics, migration agents, law firms, wealth managers, financial advisors, real estate developers, and international firms involved in investment migration.

Born from the need for a global, credible, “go-to” publication, the 2nd IM Yearbook offers valuable access to a prime target audience of top industry influencers, decision makers, and the foremost referral network to the world’s most influential Investment Migration programmes: Government officials such as Heads of CIU’s, policy makers, academics, migration agents, law firms, wealth managers, financial advisors, real estate developers, and international firms involved in investment migration.

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<strong>IM</strong><br />

INVESTMENT<br />

MIGRATION<br />

YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Navigating<br />

towards<br />

Next-Generation<br />

Transparency<br />

An Unseen<br />

Force for<br />

Good<br />

Deep Dive<br />

Due Diligence<br />

Delivers Level<br />

III Security to<br />

the Industry<br />

Rollout of First<br />

Global Industry<br />

Qualifications<br />

Finally Begins<br />

2nd<br />

Edition<br />

Under the Waterline:<br />

Billions of Dollars Flow into<br />

Infrastructure Investment<br />

Global Standards:<br />

A game-changing<br />

moment just<br />

got closer<br />

Who’s Who: CEOs and<br />

political leaders share<br />

essential insights on the<br />

industry landscape<br />

What’s Hot & What’s Not:<br />

The trends, events and<br />

developments influencing<br />

Investment Migration<br />

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for the past five years. Families from<br />

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thriving economy, helping it<br />

become one of the fastest growing<br />

economies in Europe.<br />

www.iip.gov.mt<br />

e: info@iip.gov.mt


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

INVESTMENT<br />

MIGRATION<br />

Meet the team<br />

YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Navigating<br />

towards<br />

Next-Generation<br />

Transparency<br />

Deep Dive<br />

Due Diligence<br />

Delivers Level<br />

III Security to<br />

the Industry<br />

An Unseen<br />

Force for<br />

Good<br />

2nd<br />

Edition<br />

Garvan Keating<br />

Chief Executive Officer<br />

keating@countryprofiler.com<br />

Rollout of First<br />

Global Industry<br />

Qualifications<br />

Finally Begins<br />

Global Standards:<br />

A game-changing<br />

moment just<br />

got closer<br />

Who’s Who: CEOs and<br />

political leaders share<br />

essential insights on the<br />

industry landscape<br />

Under the Waterline:<br />

Billions of Dollars Flow into<br />

Infrastructure Investment<br />

What’s Hot & What’s Not:<br />

The trends, events and<br />

developments influencing<br />

Investment Migration<br />

IN ASSOCIATION WITH<br />

Sonja Lindenberg<br />

Editor<br />

lindenberg@countryprofiler.com<br />

CountryProfiler Ltd is a specialist publisher of country<br />

information that assists corporations managing operations<br />

across national borders with trade, investment and relocation<br />

decisions. CountryProfiler is recognised by senior business<br />

executives, government representatives, institutions and<br />

global organisations as a leading provider of informative,<br />

insightful and actionable country intelligence.<br />

Giulia Desogus<br />

Editorial Assistant<br />

giulia@countryprofiler.com<br />

Europe<br />

64, St Anne Court, Suite 2, Bisazza Street,<br />

Sliema SLM 1642 - Malta<br />

T: +356 <strong>20</strong>34 <strong>20</strong>34<br />

North America<br />

Suite 21-2123, Walkers Line,<br />

Burlington, Ontario L7M 4Z9 - Canada<br />

Alina Anisimova<br />

Journalist<br />

alina@box-design.net<br />

Email: info@countryprofiler.com<br />

Website: www.countryprofiler.com<br />

Research and Contributions<br />

CountryProfiler staff<br />

Printing<br />

Gutenberg Press, Malta<br />

Publication Date<br />

June <strong><strong>20</strong>19</strong><br />

Melissa Puglisevich<br />

Office Manager<br />

puglisevich@countryprofiler.com<br />

ISBN<br />

978-99957-1-538-0<br />

All rights reserved. Reproduction in whole or part is strictly<br />

prohibited without the written permission of the publisher.<br />

Opinions expressed in <strong>IM</strong> <strong>Yearbook</strong> are not necessarily<br />

those of the editor or publisher. All reasonable care is taken<br />

to ensure truth and accuracy, but the editor and publisher<br />

cannot be held responsible for errors or omissions in<br />

articles, advertising, photographs, or illustrations.<br />

Ramon Micallef<br />

Art Director<br />

ram@box-design.net<br />

4


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<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Contents<br />

Facts & Figures....................................................................8<br />

Industry Profile:<br />

A New World of Possibilities.....................................12<br />

Putting our House in Order<br />

Bruno L’ecuyer..................................................................... 18<br />

A Qualified Difference................................................22<br />

New Membership Structure<br />

for a Stronger Industry<br />

Jacqueline Gauci ................................................................23<br />

Investment Migration: The New Normal<br />

Juerg Steffen.........................................................................24<br />

Diversify to Grow<br />

Austin T. Fragomen............................................................28<br />

Taxing Times: Why the OECD<br />

Didn’t Get it Right<br />

Zac Lucas.............................................................................30<br />

Time for Renewal<br />

Bob Kraft...............................................................................32<br />

Why Strategy is Everything<br />

Edward Beshara..................................................................34<br />

Inside China’s Migration Industry:<br />

Too Big to Be Ignored<br />

Larry Wang.........................................................................36<br />

We Need to Enter an Era of Coopetition<br />

Martin O’Connor................................................................38<br />

Investor Citizenship and the EU:<br />

Zooming in on the European<br />

Commission’s Ill-Informed Analysis<br />

Dimitry Kochenov............................................................. 40<br />

Trends & Topics............................................................ 44<br />

The Power of Transparency<br />

Yakof Agius...........................................................................54<br />

We Need to Act Responsibly<br />

Giselle Bru............................................................................58<br />

Regulated Consultants<br />

Keep Fraud at Bay<br />

Gerd Damitz....................................................................... 60<br />

Global Citizen Tax to<br />

Shift Industry Focus?<br />

Armand Arton...............................................................................63<br />

What it Takes to Build an<br />

Efficient RCBI Programme<br />

Stéphane Tajick...................................................................64<br />

Furthering the Investment Migration<br />

Industry’s Sustainability<br />

Julia Farrugia Portelli........................................................66<br />

The World of Investment Migration:<br />

What’s New?......................................................................70<br />

In Focus: Moldova<br />

Iulia Petuhov.......................................................................72<br />

Inside the MRVA<br />

Charles Mizzi....................................................................... 73<br />

Cyprus Update<br />

Michalis P. Michael....................................................................74<br />

3 Questions with...<br />

Jonathan Cardona......................................................................76<br />

How to Work Together,<br />

How to Win Together<br />

Due Diligence Roundtable................................................78<br />

The Real Drivers<br />

Behind Applications<br />

Sonia Spencer............................................................................... 84<br />

Disrupting the Nation State..................................... 86<br />

The Big Picture Idea: Nation as a Service<br />

Kaspar Korjus..................................................................... 90<br />

Make a Real Impact<br />

Simon Anholt................................................................................92<br />

The Big Migration Debate:<br />

Finding the Missing Link<br />

Khalid Koser.........................................................................94<br />

Expatland: The World’s Most<br />

Influential Country<br />

John Marcarian...................................................................95<br />

Events..................................................................................97<br />

Who’s Who......................................................................102<br />

6


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Joann Arweiler, Managing Director<br />

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Laura Austin, Head of Investment Migration Due Diligence<br />

212-885-7493 / laustin@bdo.com<br />

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www.bdo.com<br />

© <strong><strong>20</strong>19</strong> BDO USA, LLP. All rights reserved.


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Facts & Figures<br />

The investment migration industry has experienced exponential growth in the past years.<br />

More than a dozen countries today offer citizenship-by-investment programmes. While these<br />

programmes often dominate the narrative and news of the industry, many more nations<br />

operate residence-by-investment (RBI) programmes for investors, with major global players<br />

such as the US, the UK, Canada, Australia, and New Zealand participating in this industry.<br />

100<br />

60<br />

30 7<br />

countries offer some<br />

form of investment<br />

migration programme<br />

jurisdictions are<br />

actively promoting<br />

their programme<br />

programmes are<br />

attracting the largest<br />

share of applicants<br />

out of the G-<strong>20</strong> members<br />

operate some form of<br />

investment migration<br />

programme<br />

8


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

30%<br />

Only 30% of migrating high-networth<br />

individuals come into<br />

countries under investor migration<br />

programmes, New World Wealth<br />

claims. Most still come in via work<br />

transfers, citizenship by ancestry,<br />

spousal visa and family visa.<br />

80%+<br />

Approximate<br />

percentage of<br />

Chinese applicants<br />

to any residence<br />

programme in<br />

the world<br />

36%<br />

According to the <strong><strong>20</strong>19</strong> Knight<br />

Frank ‘wealth report’, 36%<br />

of high net worth individuals<br />

(HNWIs) already hold a<br />

second citizenship and<br />

passport, with 26% planning<br />

to emigrate permanently.<br />

10%<br />

Refugees and<br />

asylum seekers<br />

constitute<br />

roughly 10% of<br />

all international<br />

migrants.<br />

At a Glance: Countries with Popular Investment Migration Programmes<br />

Citizenship Programmes<br />

Antigua & Barbuda • Austria • Bulgaria<br />

Cambodia • Cyprus • Dominica • Grenada<br />

Jordan • Malta • Moldova<br />

Montenegro – upcoming<br />

St. Kitts & Nevis • St. Lucia • Turkey • Vanuatu<br />

Residence Programmes<br />

Anguilla • Australia • Canada • Cyprus<br />

France • Greece • Hong Kong • Ireland • Italy<br />

Jersey • Latvia • Malaysia • Malta • Monaco<br />

New Zealand • Portugal • Singapore<br />

Spain • Thailand • UAE • UK • USA<br />

5000<br />

550+<br />

400+<br />

$3<br />

billion<br />

estimated number<br />

of people acquiring<br />

citizenship abroad<br />

per year<br />

Number of agents<br />

licensed across<br />

the world<br />

Members of the<br />

Investment Migration<br />

Council, coming from<br />

over 55 different countries<br />

Value of the<br />

citizenship-byinvestment<br />

industry<br />

9


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

150 – 170 countries<br />

An EU passport typically allows visa-free<br />

travel to between 150 and 170 countries<br />

14 million<br />

There are approximately<br />

14 million high-net-worth<br />

individuals in the world,<br />

each with net assets of<br />

$1 million or more.<br />

€9.2 billion<br />

European countries<br />

benefitted from<br />

investment migration<br />

by receiving €9.2<br />

billion during the<br />

<strong>20</strong>08-<strong>20</strong>18 period.<br />

2-30%<br />

Percentage of GDP contribution of investment<br />

migration programmes in some countries<br />

1984<br />

The year when St. Kitts and Nevis<br />

introduced the first CBI programme<br />

108,000<br />

About 108,000<br />

millionaires migrated<br />

countries in <strong>20</strong>18,<br />

according to a study by<br />

New World Wealth.<br />

$5 billion<br />

Annual investment<br />

into US economy by<br />

EB-5 Programme<br />

$100,000 - $2.4 million<br />

Range of minimum investment required by<br />

different CBI programmes around the world<br />

258 million<br />

There were 258 million<br />

international migrants in<br />

<strong>20</strong>17, representing 3.4%<br />

of global population.<br />

This number has<br />

almost tripled in<br />

the past 50 years.<br />

2/3rds<br />

Two-thirds of<br />

all international<br />

migrants were born<br />

in Asia or Europe.<br />

130%<br />

China’s wealth has<br />

increased by 130%<br />

between <strong>20</strong>08 and<br />

<strong>20</strong>18, New World<br />

Wealth found out.<br />

$6.7 trillion<br />

McKinsey Global Institute<br />

(MGI) estimates that<br />

migrants contributed roughly<br />

$6.7 trillion, or 9.4 per cent,<br />

to global GDP in <strong>20</strong>15 – some<br />

$3 trillion more than they<br />

would have produced in<br />

their origin countries.<br />

12,000<br />

12,000 high-net-worth individuals migrated to Australia in <strong>20</strong>18,<br />

beating its main rival the US for the fourth year running. The USA<br />

experienced a wealth inflow of 10,000 millionaires, followed by<br />

Canada (4,000) and Switzerland (3,000), according to New World Wealth.<br />

Sources: United Nations,<br />

Knight Frank <strong><strong>20</strong>19</strong> Wealth Report,<br />

Stephane Tajick Consulting, Henley<br />

& Partners, European Parliament<br />

Research Service, McKinsey Global<br />

Institute, New World Wealth,<br />

CountryProfiler Research<br />

10


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<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

INDUSTRY PROFILE:<br />

A New World of<br />

POssibilit<br />

Growth and expansion continue to be the hallmarks of the investment<br />

migration industry, triggering a drive towards higher standards and<br />

a concerted effort to future-proof the industry.<br />

12


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

ies<br />

The rapid expansion of the investment<br />

migration industry shows no<br />

sign of slowing down. Across the<br />

entire industry spectrum, every nook<br />

and cranny has been experiencing<br />

growth. New programmes have come online and<br />

even more in the offing, raising questions among<br />

industry commentators on their sustainability.<br />

Despite the question marks, the appeal to clients<br />

appears to continue unabated, along with the<br />

number of new entrants seeking to service the<br />

growing appetite for visa-free travel by the globally<br />

mobile. The exponential growth that the<br />

industry is enjoying has not gone unnoticed by<br />

major international institutions and standardsetting<br />

organisations such as the EU, the <strong>IM</strong>F and<br />

the OECD that are all expanding their interest<br />

and flexing their powers over the industry.<br />

Redoubling Efforts<br />

International organisations, policy-makers and<br />

the media continue to view the industry with a<br />

critical eye, though there has been a notable softening<br />

in their stance. However, the decision of<br />

the European Parliament to shutter golden visa<br />

and passport programmes sent a clear message to<br />

the industry that the concerns of policy-makers<br />

and wider society cannot be ignored. With no<br />

shortage of opposing voices to the investment<br />

migration industry, it is clear that there needs<br />

to be a redoubling of advocacy efforts to ensure<br />

that programmes are not sanctioned, or worse<br />

still, closed altogether. However, many believe<br />

the current scrutiny is necessary to drive transformational<br />

change and lead the investment<br />

migration industry into a new era. Today, almost<br />

everyone in the industry agrees that regulation<br />

and common standards need to be the next steps.<br />

Despite the headwinds that the industry is facing,<br />

many governments are seeing and witnessing the<br />

benefits that investment migration programmes<br />

can bring to their countries, whether it be attracting<br />

the best and the brightest talent via their entrepreneur<br />

and start-up schemes or the key role<br />

these programmes have played in bolstering infrastructure<br />

capacity and providing a steadying<br />

hand in times of economic uncertainty.<br />

13


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Three Decades of Growth<br />

The investment migration industry has grown in<br />

leaps and bounds since St. Kitts and Nevis broke<br />

new ground with the launch of the first citizenship-by-investment<br />

programme in 1984. Now 35<br />

years on, the industry marks this major milestone<br />

with a renewed confidence, as the sector<br />

moves beyond a niche attraction for the few and<br />

goes ever more mainstream. The business model<br />

has evolved over the years and was developed<br />

further with the introduction of the golden visa<br />

concept by Portugal. A relatively new phenomenon<br />

is the emergence of start-up and entrepreneur<br />

visa programmes, with which governments<br />

seek to entice a whole new generation of global<br />

innovators. Today over 100 citizenship and visa<br />

programmes are in existence, generating billions<br />

in investments that are being mobilised to create<br />

jobs and economic activity.<br />

Investment migration has never been far from<br />

controversy and often maligned by policy-makers,<br />

influencers and the media alike. The concept<br />

of citizenship by investment in particular still<br />

stokes resentment that programmes do little but<br />

allow the rich to buy privileged access to their<br />

countries. Though their sentiments may be<br />

genuine, many of them may be surprised to learn<br />

that five of the G-7 members and seven of the<br />

G-<strong>20</strong> countries have been employing some form<br />

of investment migration programme to bolster<br />

inward investment.<br />

The visa, over citizenship, programmes have<br />

long been the more acceptable face of the industry<br />

and have been used by countries such as the<br />

US, Canada and the UK to attract people, capital<br />

and know-how. A major milestone and turning<br />

point in the acceptance of citizenship and visa<br />

programmes was the decision by two EU countries,<br />

Malta and Cyprus, to introduce citizenshipby-investment<br />

programmes. Globalisation has<br />

been a good travel companion for the investment<br />

migration industry. The global citizen who wants<br />

access to the world for business and leisure has<br />

become a reality that is driving demand for investment<br />

migration products, which are becoming<br />

ever more refined and diverse.<br />

Big Impact<br />

It is estimated that investment migration accounts<br />

for $2 billion annually, industry, but it<br />

brings in tens of billions in investment. In terms<br />

of economic impact, programmes represent anything<br />

between 2% and as high as 30% of GDP<br />

in some countries, and can be a defining factor<br />

between an economic surplus and a deficit.<br />

Across the world investment migration programmes<br />

have been the catalyst for major infrastructural<br />

improvements, including resorts,<br />

harbours, airports, hospitals, office buildings<br />

and luxury residential developments, which in<br />

turn have had a massive multiplier effect on the<br />

respective economies. These programmes are<br />

not only influential in delivering cutting-edge<br />

infrastructure, investments into companies, startups<br />

and R&D programmes; they are also having<br />

the effect of generating whole new economic<br />

sectors that did not exist before their introduction.<br />

Governments increasingly like the idea<br />

of raising non-debt bearing capital to diversify<br />

their economies at a relatively low cost. But while<br />

these programmes present a golden opportunity<br />

for many countries, governments equally need to<br />

be stringent in ensuring the windfall they are enjoying<br />

today is directed exclusively towards productive<br />

investments that will pay dividends in the<br />

future and not be tempted to finance day-to-day<br />

expenses, which could expose their economies to<br />

unintended risks.<br />

Two Tiers<br />

As investment migration programmes evolve<br />

and develop further, the distinguishing factors<br />

between programmes will be about service, professionalism<br />

and the impact of the investment.<br />

Some 60 countries are actively promoting their<br />

programmes, with 30 of them being the most relevant<br />

and attracting the largest share of applicants.<br />

Countries such as the US, Canada, Australia, and<br />

the UK have cemented their position as preferred<br />

destinations for people with a desire to relocate,<br />

attracting wealthy migrants from all corners of<br />

the world. However, the expectation is that access<br />

to these tier-1 countries will become more exclusive.<br />

Programmes are widely expected to go<br />

up in price, which is reflective of their premium<br />

status. Beyond the most desirable places in the<br />

Now 35 years on,<br />

the industry marks<br />

this major milestone<br />

with a renewed<br />

confidence as the<br />

sector moves beyond<br />

a niche attraction<br />

for the few and goes<br />

evermore mainstream.<br />

14


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

world to live in, more and more programmes<br />

are coming online to compete and attract global<br />

citizens. Turkey, Jordan, Moldova and soon<br />

Montenegro are the latest entrants to the market<br />

and will follow a long list of rivals, which include<br />

Caribbean and European countries. With an estimated<br />

5,000 applicants for citizenship-by-investment<br />

programmes and further tens of thousands<br />

acquiring golden visas globally, the question on<br />

everyone’s mind is if there is too much product<br />

for the market or if the emergence of new players<br />

will fuel further demand. On this question the<br />

jury is still out.<br />

The Big China Question<br />

China remains the dominant market for the<br />

entire industry. While China is a great source<br />

market, accounting for roughly 80% of applications<br />

to any residence programme, from a business<br />

and industry-risk point of view, there is very<br />

much an over-reliance on one market. To ensure<br />

the sustainability of the business model, both<br />

programmes and agents are waking up to this<br />

problem, and a most notable trend in more recent<br />

years has been the increase in business coming<br />

from new markets such as India, Vietnam, Russia<br />

and South Africa. The recent price drop some<br />

programmes have experienced also means acquiring<br />

a second passport has become increasingly<br />

affordable for people of more modest<br />

means. This development might further widen<br />

the already existing divide between top tier and<br />

second tier programmes. While the strategy of<br />

the tier-1 programmes will increasingly revolve<br />

around ultra-high-net-worth individuals with<br />

at least $30 million, the lower cost and more accessible<br />

programmes might appeal to high-networth<br />

and mass affluent clients with $1 million to<br />

$10 million of investable wealth.<br />

The major task for the industry and programmes<br />

going forward will be to find the<br />

balance between the needs of the country and<br />

meeting the expectations of the applicants. Up to<br />

now property investments of one kind or another<br />

have featured prominently in all programme offerings;<br />

however, agents report that to a large<br />

degree acquiring property is the least preferred<br />

route for client investment. Property investment<br />

will always hold an appeal, but it will be on a<br />

more equal footing with other asset classes and<br />

investment options. There are already alternatives<br />

in the market that are resonating with<br />

wealthy clients, including investing in a property<br />

fund as opposed to purchasing property, and<br />

loan provision as opposed to equity investment.<br />

A New Approach<br />

Governments have to go beyond their current<br />

vanilla-type offering and ensure investments are<br />

being directed to where they can be most productive<br />

for the country, its citizens and, ultimately,<br />

the client. Countries should look at allowing<br />

citizenship or residence applicants to invest on a<br />

portfolio basis, whereby part of their investment<br />

can be in equities, bonds, property, loan funds,<br />

philanthropic causes, listed entities, private enterprises,<br />

start-ups and angel investment funds,<br />

which combined can provide more impact and<br />

encourage a wider array of economic activity.<br />

This also opens agents to the opportunity of offering<br />

a whole host of value-added services to<br />

their clients.<br />

The industry will also need to have millennials<br />

in its sights. With 23% of the world’s millionaires<br />

being millennials, this clientele has its own expectations<br />

of what they want and how they want to be<br />

serviced. Millennials in particular are showing a<br />

greater interest in impact investing and what positive<br />

effect their contribution is having on their host<br />

countries. The industry not only has an important<br />

role to play in distributing capital where it can<br />

be best utilised for society’s good, it can also help<br />

countries gain an outsized influence. Investment<br />

migration offers a significant opportunity for<br />

countries to expand the concepts of residence and<br />

citizenship, and novel proposals for what could be<br />

best described as ‘nation as a service’ have already<br />

surfaced. While some say this is ‘utopian thinking’,<br />

Estonia, with its e-residency programme, is<br />

providing a first glance at what the future might<br />

look like. This concept could actually see countries<br />

develop into service and product platforms<br />

for fee-paying ‘citizens’, who can subscribe or unsubscribe<br />

to their offering.<br />

15


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

More Competition<br />

The industry landscape remains very fragmented<br />

and ripe for consolidation. Outside of the<br />

odd whale in China, a few major players have<br />

emerged, including Henley & Partners, Arton<br />

Capital, CS Global, Kylin Prime, Apex and legal<br />

firm Fragomen, which are followed by a large<br />

number of smaller firms. Increasing competition<br />

and a need to scale up may well see the<br />

first wave of mergers and acquisitions occurring<br />

sooner rather than later. Conversely, the industry<br />

could be open to expansion and see more players<br />

coming into the space, beyond the boutique advisory<br />

firms that have been in place for many<br />

years. In the same way as investment migration<br />

consultancies are starting to offer complementary<br />

services, such as private banking, wealth and<br />

asset management, to their clients, traditional<br />

advisory firms could add investment migration<br />

as a product.<br />

Global Standards<br />

The decision by the European Parliament to<br />

strongly recommend the phasing out of visa<br />

and passport programmes sent a crystal clear<br />

message that the investment migration model<br />

will have to evolve materially to avoid a broad political<br />

and social backlash. Fears of a potential increase<br />

in security threats and low consumer protection<br />

standards reverberate across the entire<br />

industry. Questions on transparency and adherence<br />

to international standards on anti-money<br />

laundering and compliance regulations brought<br />

the sector into the sharp focus of other countries<br />

and international organisations such as the EU,<br />

the <strong>IM</strong>F and the OECD which have demanded<br />

tighter controls across the industry and tighter<br />

background checks on applicants. This means<br />

setting common standards for golden visas and<br />

citizenship programmes is now a must. The industry<br />

more than ever needs to recognise the<br />

need to either self-regulate or accept that rules<br />

will be imposed on it. The regulation of agents<br />

and the development of effective consumer protection<br />

measures are being viewed as important<br />

steps towards improving the sector’s reputation.<br />

The investment migration industry currently<br />

remains largely unregulated, with only a handful<br />

of countries having established an independent<br />

regulator to oversee the operation of their programmes.<br />

Huge regulatory pressures emanating<br />

from the EU and G<strong>20</strong>-initiatives on anti-money<br />

laundering and anti-terror legislation are requiring<br />

the industry to embark on a major overhaul<br />

of its customer due diligence to comply with new<br />

global standards.<br />

Educating an Industry<br />

With the introduction of certification by the<br />

Investment Migration Council, <strong><strong>20</strong>19</strong> will also go<br />

down as the year in which professional educational<br />

programmes geared towards the investment<br />

migration industry have been launched.<br />

This will help demonstrate that both programmes<br />

and agents are a step closer to reaching<br />

the much-needed high standards demanded<br />

by governments, policy-makers and the general<br />

public. As the industry becomes increasingly<br />

sophisticated in its approach, it is now recasting<br />

itself in a new light. This is being seen positively<br />

by the EU, which has long kept the industry on<br />

the fringes of policy discussions. The current dialogue<br />

between the industry and EU policy- and<br />

decision-makers is a very welcome development<br />

and seen as an opportunity to be more proactive<br />

in shaping and positively contributing to the<br />

debate at EU level.<br />

Shanghai to Timbuktu<br />

Countries offering investment migration programmes<br />

are acutely aware that they risk having<br />

their programmes suspended or forced to close<br />

if they were to grant residence or citizenship<br />

to individuals without thorough background<br />

checks. Because of the importance of the sector<br />

to many economies, programmes have implemented<br />

KYC and due diligence standards that<br />

now go far beyond those of the banking and the<br />

financial services industries. Employing the services<br />

of former intelligence officers, the industry<br />

has moved beyond desk research and database<br />

searches in its quest to really ‘know the customer’.<br />

It is becoming increasingly common practice<br />

of programmes, service providers and agents to<br />

engage specialist agencies who intensively scrutinise<br />

clients coming through the pipeline. From<br />

the gleaming towers of Shanghai to the dusty<br />

roads of Timbuktu, these firms are employing<br />

experts on the ground to verify every aspect of<br />

an applicant’s life and source of wealth. KYC and<br />

due diligence procedures are particular areas<br />

where the industry has attracted unfair criticism.<br />

A Better Future<br />

The industry has enjoyed some very positive<br />

momentum over the past number of years, with<br />

record numbers of affluent citizens seeking out<br />

investment migration programmes. A major plus<br />

for the industry has been the ability to attract entirely<br />

new customer groups to the concept of acquiring<br />

a second residence or citizenship, which<br />

has helped expand the pool of potential clients<br />

and, in turn, widened the choice of programmes<br />

available. But it hasn’t all been smooth sailing.<br />

Pricing pressures not only impacted the bottom<br />

line but also the image of the industry. Although<br />

today both policy-makers and the general public<br />

are better informed about the industry’s processes<br />

and safeguards, this doesn’t mean they are necessarily<br />

in favour of it. The industry has no choice<br />

but to reinvent its business as one that is more socially<br />

and economically attuned to today’s societies.<br />

The reward could be a better, more sustainable<br />

and more accepted industry. n<br />

A major plus for the<br />

industry has been<br />

the ability to attract<br />

entirely new customer<br />

groups to the<br />

concept of acquiring<br />

a second residence<br />

or citizenship, which<br />

has helped expand<br />

the pool of potential<br />

clients and, in turn,<br />

widened the choice of<br />

programmes available.<br />

16


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Putting our House in<br />

Order<br />

The development of global standards for the investment migration industry needs<br />

to be an urgent priority for the sector. Long-term success will only be brought<br />

about if international institutions and civil society have confidence in the industry,<br />

writes Bruno L’ecuyer, Chief Executive of the Investment Migration Council.<br />

“The most recent<br />

attempts of the<br />

European Commission<br />

to initiate a wider<br />

discussion on the<br />

topic by inviting<br />

experts, civil<br />

society and industry<br />

representatives is a<br />

major step forward to<br />

a better understanding<br />

of the industry and,<br />

hopefully, setting<br />

appropriate standards<br />

in the near future.”<br />

Investment migration is a $2 billion industry<br />

responsible for significant investment, job<br />

creation and societal development, and it accounts<br />

for billions of direct and indirect revenues<br />

in some smaller sovereign states. However, there<br />

are currently no established global standards for<br />

investment migration. Setting such standards<br />

has always been of exceptional importance for<br />

the Investment Migration Council (<strong>IM</strong>C), while<br />

having a clear and coherent framework is now<br />

probably more important than ever. There are<br />

at least two reasons for that. Firstly, all involved<br />

parties should follow a set of harmonised and<br />

well-established rules which would certainly<br />

contribute to better compliance with global<br />

financial regulation. Secondly, having global<br />

standards would contribute to an improved understanding<br />

of the investment migration industry<br />

and improve trust by the outside world.<br />

The lack of global standards and good understanding<br />

of both citizenship and residence<br />

programmes may not only be confusing, but also<br />

a source of distrust towards the entire industry.<br />

Money is a sensitive topic. When brought into<br />

connection with citizenship, which is perceived<br />

by many as something which money shouldn’t<br />

buy, but also with wealthy individuals who,<br />

unlike many of us, can afford to pick and choose<br />

their nationality, the investment migration industry<br />

is easily yet unfairly stigmatised. A number<br />

of studies testify that an enhanced transparency<br />

and better regulatory framework for the industry<br />

would mark a significant development in addressing<br />

concerns related to investment migration<br />

programmes.<br />

Finding the Right Balance<br />

While well-designed investment migration programmes<br />

imply that the interests of the clients<br />

and those of the governments are aligned, this is<br />

where key issues usually arise. Plenty of mistakes<br />

can be made, undermining the interests of both<br />

the government and the clients. For example, the<br />

due diligence requirements established by the<br />

18


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

government eager to cash in on the programme<br />

could be too lenient. While this can be presented<br />

as a positive feature, since a visa or a nationality<br />

is easier to acquire, this is highly problematic<br />

in the long run. When such leniency is discovered,<br />

it undermines the trust of other states in<br />

the nationalities granted, reducing the value of<br />

investment for all clients and, ultimately, undermining<br />

the financial viability of the programme.<br />

Similarly, programmes lacking transparency, or<br />

where rules are not sufficiently clear and strict,<br />

can suffer from corruption, undermining trust<br />

and value of investments.<br />

On the other side of the coin, the attractiveness<br />

of a most diligently designed programme<br />

can be radically different from real life. Studies<br />

show that the added value of some reputable<br />

programmes is far from clear, as the investments<br />

they generate are not providing sufficient added<br />

value to the countries’ economies in order to<br />

justify the level of resources required to run the<br />

programmes. All in all, very serious individual<br />

scrutiny of the components of each residence<br />

and citizenship-by-investment programme is required<br />

before any conclusions are drawn.<br />

Addressing Criticism and<br />

Contributing to Professionalism<br />

The investment migration industry has been<br />

loudly criticised by several international institutions<br />

and organisations. Aiming to contribute to<br />

various improvements in the field of investment<br />

migration, the <strong>IM</strong>C takes criticism seriously. It<br />

is fair to say that most criticism is largely due<br />

to the lack of global standards under which the<br />

entire industry should be operating, as well as<br />

lack of understanding of the application and<br />

assessment procedures. In such circumstances,<br />

the European Commission’s view of citizenship<br />

programmes as a ‘risk to security’ should not<br />

come as a surprise.<br />

In fact, the most recent Report on ‘Financial<br />

Crimes, Tax Evasion and Tax Avoidance’ of<br />

the Special Committee on financial crimes,<br />

tax evasion and tax avoidance at the European<br />

Parliament (TAX3 Report); the Report of the<br />

European Commission on ‘Investor Citizenship<br />

and Residence Schemes in the European Union’;<br />

and the Study of the European Parliamentary<br />

Research Service on ‘Citizenship by Investment<br />

and Residency by Investment Schemes in the<br />

EU’, have shed a light on a number of aspects<br />

which could indeed be problematic in the<br />

absence of global investment migration rules.<br />

The integrity of the applicants’ background<br />

checks and due diligence are highly prioritised<br />

by the European Union. This has been discussed<br />

along similar lines in all three documents. Thus,<br />

the Special Committee on financial crimes, tax<br />

evasion and tax avoidance noted in the TAX3<br />

Report that ‘citizenship or residence could be<br />

granted through these schemes without proper<br />

or indeed any customer due diligence having<br />

Bruno<br />

L’ecuyer<br />

is the first<br />

Chief Executive of the<br />

Investment Migration<br />

Council, the worldwide<br />

association of investor<br />

migration professionals.<br />

Bruno leads the Secretariat<br />

and is responsible for<br />

all <strong>IM</strong>C operations. A<br />

regular contributor to<br />

international publications<br />

such as Forbes, and<br />

speaker at conferences<br />

in Europe, the Middle<br />

East and Asia, he has<br />

held positions in London,<br />

Paris and Hong Kong. He<br />

has extensive expertise<br />

and experience in<br />

the management and<br />

expansion of a professional<br />

services association.<br />

A member of the<br />

Governing Board, Bruno<br />

acts as its Secretary.<br />

been carried out by the competent authorities’.<br />

The EPRS’s Study emphasised that CBI/RBI<br />

schemes ‘enable false statements to be made<br />

on residency and can thereby undermine due<br />

diligence procedures’. Finally, the European<br />

Commission also expressed its concern noting<br />

inter alia that ‘in most Member States the family<br />

members of investors are not subject to enhanced<br />

due diligence, which could entail security risks’.<br />

Other problematic aspects emphasised by EU<br />

institutions include transparency issues and<br />

governance of the programmes, risks of money<br />

laundering, corruption and tax evasion, lack of<br />

genuine link etc.<br />

All concerns deserve proper attention and<br />

deeper clarification. The most recent attempts<br />

of the European Commission to initiate a wider<br />

discussion on the topic by inviting experts, civil<br />

society and industry representatives is a major<br />

step forward to better understanding of the industry<br />

and, hopefully, setting appropriate standards<br />

in the near future. The <strong>IM</strong>C has addressed<br />

criticism directed towards the industry on multiple<br />

occasions. We will participate constructively<br />

in future discussions aimed at the clarification of<br />

citizenship migration and at the building of trust<br />

and confidence with international institutions<br />

and civil society.<br />

Furthermore, the <strong>IM</strong>C has built a strong<br />

platform for formal education of those working<br />

in the investment migration industry. The new<br />

framework for Education and Training that has<br />

been created by the <strong>IM</strong>C will provide for all levels<br />

of background and experience. The courses aim<br />

at promoting integrity, ethics, transparency and<br />

best practices, and will be delivered by <strong>IM</strong>C<br />

Education and Training. A good education is the<br />

foundation of qualified professionals. The <strong>IM</strong>C’s<br />

goal is to shape future professionals by helping<br />

them improve their understanding of the industry<br />

and enabling them to develop valuable skills<br />

and knowledge. n<br />

About the <strong>IM</strong>C<br />

Set up five years ago as a non-profit industry association, the Investment Migration<br />

Council (<strong>IM</strong>C) brings together the leading stakeholders in the field of investment<br />

migration. It is the worldwide association of investment migration professionals<br />

and the industry’s first and only credible self-regulatory body. As such, the <strong>IM</strong>C<br />

gives the industry a voice and significant accountability. The <strong>IM</strong>C works towards<br />

setting up high standards for the industry to be adhered to by all players. In particular,<br />

<strong>IM</strong>C’s mission has been largely defined by the following five goals:<br />

• Setting the global standards in relation to residence<br />

and citizenship-by-investment;<br />

• Promoting competence, continued professional development<br />

and high ethical standards among its members;<br />

• Improving public understanding and transparency of<br />

investor residence and citizenship programmes;<br />

• Contributing to the scholarly field of investment migration;<br />

• Being the trusted partner and the leading platform for<br />

professionals, academia and governments.<br />

19


<strong>IM</strong><br />

INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

400+ members<br />

Official List of Members <strong><strong>20</strong>19</strong><br />

360 Advisory & Management GmbH<br />

360 Citizen Management Consultancies<br />

A. Karitzis & Associates LLC<br />

Abreu Advogados<br />

Academy Finance<br />

ACT Advisory Services Limited<br />

ACTIVE CAPITAL / WTEC<br />

Ahmed Ghattour & Co<br />

AIT Accounting & Management<br />

Services Ltd<br />

Alves & Co<br />

AME Second Citizenship Ltd<br />

Andreas Demetriades & Co LLC<br />

Andreas P. Siapanis & Associates LLC<br />

AOM Visa Consulting<br />

AP Group Global<br />

Areti Charidemou & Associates LLC<br />

ARQ Group<br />

Astons Group Ltd.<br />

Azevedo, Aldet & Moctezuma, Lda<br />

BDO Consulting<br />

Belion Partners LLP<br />

Beshara Global Migration Law Firm<br />

BEYOND Residence and Citizenship<br />

Bluemina Citizenship & Residency<br />

BLVUE Zürich Advisory AG (Ltd.)<br />

Bond University<br />

Bulgarian Citizenship Ltd<br />

Callamus<br />

Capital Union Bank<br />

Capstone Advisory Co. Ltd<br />

Carib International<br />

Century Capital Inc.<br />

Chetcuti Cauchi Advocates<br />

Chriso Savva LLC<br />

Christina Georgaki-Charavgi Law Office<br />

Christodoulos G. Vassiliades & Co LLC<br />

Ciba Invest<br />

Citizen Lane<br />

Citizenship By Investment<br />

Unit - Antigua & Barbuda<br />

Citizenship by Investment<br />

Unit - Saint Lucia<br />

Citizenship Solutions<br />

CiviQuo<br />

CJ International Group SRL<br />

CLT International Ltd<br />

Cosmic Business Initiation Services<br />

Credit Suisse Group<br />

CSB International Ltd.<br />

Datuk Seri Dr. Nelson Pung<br />

Deloitte Malta<br />

Dem. A. Nicolaides & Sons Ltd<br />

Dimitrov, Petrov & Co Law Firm<br />

Discus Holdings<br />

DomizilPlus Trust Office<br />

DORDA Rechtsanwälte GmbH<br />

Efthymios G. Navridis &<br />

Asscociates Law Firm<br />

Eksper Consultancy<br />

Emmanuel Jacques Almosnino<br />

Energopiisi<br />

Eurofast EU<br />

Exiger Diligence<br />

Exiger LLC<br />

Fakhoury Law Group<br />

Fenech Farrugia Fiott Legal<br />

Fidesco Trust Corporation<br />

Fidescorp Limited<br />

Fiduciana Trust (Cyprus) Limited<br />

Fincasa Capital<br />

First Advisory Trust reg.<br />

Foster LLP, Global<br />

Fragomen Worldwide<br />

Frendo Advisory<br />

Ganado & Associates<br />

GICG Global Information<br />

Consulting Group<br />

Global Citizens Caribbean Inc.<br />

Global Migration<br />

Global Nomad Consulting<br />

Global Residence & Citizenship<br />

Practitioners Inc.<br />

Globe Detective Agency (P) Ltd.<br />

Go2Europe<br />

Golden Visa Consultancy<br />

Grant, Joseph & Co<br />

Green Light Management Consultancy JLT<br />

Grenada Citizenship by<br />

Investment Programme<br />

GVZH Advocates<br />

Henley & Partners<br />

Hestia Investments Consulting Lda<br />

Hill & Hill Chambers<br />

Immigrant Invest<br />

immVest International Limited<br />

Imperio Global Citoyen<br />

Integritas Group<br />

Inter-Tax Consultants<br />

Intercorp International LTD<br />

International Center for<br />

Globalization and Development<br />

International Residency Citizenship<br />

Invest & Settle<br />

Invest in the USA (IIUSA)<br />

<strong>20</strong>


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

from 55+ countries<br />

Investaureum Lda.<br />

Invest<strong>IM</strong>M<br />

Investment Migration Insider<br />

Island Living Investment Services Ltd<br />

Joseph Rowe Attorneys-at-<br />

Law and Notaries Public<br />

Katerina Marini & Associates Law Firm<br />

KayHan Swiss LLC<br />

Ketenci & Ketenci ILP<br />

Klasko Immigration Law Partners, LLP<br />

KLZT Law<br />

Kosdromos Consulting S.R.L<br />

KPMG<br />

L Papaphilippou & Co LLC<br />

La Vida Europe Ltd.<br />

Laferla Insurance Agency Limited<br />

Latitude Consultancy Limited<br />

Law Quest<br />

Lawrence Associates Ltd.<br />

Lecanda Immigration and Nationality Law<br />

Lerotheou, Kamperis & Co LLC<br />

LTC Advisory & Services<br />

Lund University<br />

M-J Global Consultancy Services<br />

Magrath Sheldrick LLP<br />

Mahandru Associates<br />

Maisto & Associati<br />

Malta Individual Investor<br />

Programme Agency<br />

Malta Residency Visa Agency<br />

Masri Holding Sal<br />

Matthew Cassar<br />

Mc Namara & Company - Barristors,<br />

Solicitors & Notaries Royal<br />

Michael Kyprianou & Co. LLC<br />

Mifsud&Mifsud Advocates<br />

Migronis Citizenship<br />

MLH Consular Consulting<br />

MM2H<br />

Neda Azarmehr<br />

Neity Maddock<br />

New Balkans Law Office<br />

Nexia BT<br />

Nobel Trust Limited<br />

Northern Pointe Development Ltd<br />

Novafirm SA<br />

Omega Partners International<br />

OneWorld Ltd.<br />

Ousheng & Partners<br />

Papilio Services Limited<br />

Passport Legacy<br />

Passports Global Ltd<br />

PassPro Immigration Services<br />

PLAYFAIR Visa and Migration Services<br />

Polyglot Ltd.<br />

R P Merriman<br />

Radu Ghergus Law Firm<br />

Rao Consultants<br />

RC International<br />

Refinitiv<br />

RIF Trust Investments LLC<br />

Risvas & Associates Law Firm<br />

Rosemont Consulting Sarl<br />

Rostova & Westerman Law Group, P.A<br />

RSM<br />

Rutter Giappone Advocates<br />

S-RM Intelligence and Risk<br />

Consulting Limited<br />

SAAD AHSAN Law Company<br />

Saeima (National Parliament) of Latvia<br />

Sakeenah Group<br />

Scheibert & Associates<br />

Shanghai Demei Law Firm<br />

Shanghai Overseas Chinese<br />

Exit-Entry Service Co.,Ltd<br />

Shard Capital Investor Visa<br />

Solomon Harris<br />

Sothebys International Realty Cyprus<br />

Sterling Diligence<br />

Sunrise International Legal Services<br />

Swiss Insurance Partners AG<br />

SwissTaxGroup<br />

The Belgium Office<br />

Thomas John & Co<br />

University of Vienna<br />

Valadas Coriel & Associados<br />

Valmas & Associates<br />

Vardikos & Vardikos<br />

Varnavas & Varnavas<br />

V<strong>IM</strong>B Pte Ltd<br />

Vincit Union Group<br />

VIRIDIAN AG<br />

Vironobilis OÜ<br />

Visa Free Europe<br />

Visas Consulting Group Inc<br />

Wahaat<br />

Wailian Overseas Consulting<br />

Group Limited<br />

World Grenada Inc.<br />

World Immigration Service<br />

XIPHIAS Immigration Pvt Ltd.<br />

21


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Education & Training<br />

A Qualified Difference<br />

The Investment<br />

Migration Council<br />

has established a<br />

global education and<br />

training division to<br />

facilitate and build<br />

courses that offer<br />

qualifications and<br />

training for those<br />

working in the evergrowing<br />

investment<br />

migration industry.<br />

The development, or rather the<br />

apparent lack, of global standards<br />

has become one of most<br />

pressing issues facing investment<br />

migration. Many believe<br />

the recent criticism of EU institutions<br />

and international<br />

organisations will only become louder as the<br />

industry continues on its growth trajectory. The<br />

main concerns surround the lack of transparency,<br />

weak due diligence processes, possible tax<br />

evasion, money laundering, and other misuses<br />

of existing schemes. While such criticism may<br />

seem overwhelming and even unfair to honest<br />

players in the investment migration industry, the<br />

lack of global standards, which would protect<br />

those acting in good faith, takes its toll. It also<br />

makes it an easy target for criticism. This is why<br />

the Investment Migration Council (<strong>IM</strong>C) believes<br />

that global standards, education and qualifications<br />

for those working in the investment migration<br />

industry will contribute to a well-respected<br />

industry.<br />

A Platform for Education<br />

Bringing together the leading stakeholders in<br />

the field of investment migration with nearly 500<br />

members, the <strong>IM</strong>C may be used as a platform to<br />

gather all areas of the industry together to help<br />

establish professional standards, benchmarks,<br />

competencies, codes of conduct and best practices<br />

for those working in or associated with the<br />

industry. To that end, the global <strong>IM</strong>C Education<br />

and Training (<strong>IM</strong>CET) division has been established.<br />

<strong>IM</strong>CET will provide education and training<br />

for all levels of staff and experience. The core<br />

objectives of <strong>IM</strong>CET include the following:<br />

• Development of professional competencies<br />

and standards for those working in<br />

the investment migration industry;<br />

• Certificated learning opportunities<br />

that lead to <strong>IM</strong>C professional status;<br />

• Education and training for all levels of staff;<br />

• Delivery of professional training and<br />

ongoing competency development.<br />

The educational and training programmes offered<br />

by the <strong>IM</strong>C and the resulting qualifications will<br />

build solid ground for further professionalisation<br />

and responsible growth of the industry. There<br />

will be three different levels of qualifications:<br />

Certification in Investment Migration; Diploma<br />

in Investment Migration; and Post-Graduate<br />

Diploma in Investment Migration.<br />

The Certification in Investment Migration is<br />

an intermediate level course to be studied over six<br />

months. This practical introduction will lead to a<br />

professional status with the <strong>IM</strong>C and is benchmarked<br />

at Associate level for those working in<br />

the investment migration industry. The course<br />

will be taught online through <strong>IM</strong>C’s learning<br />

management system and will offer a total of five<br />

compulsory modules. Those who successfully<br />

complete the programme will be awarded the<br />

<strong>IM</strong>C Certification in Investment Migration.<br />

The Diploma in Investment Migration will<br />

be a course to be studied over a 12-month period.<br />

This programme will lead to Professional status<br />

within the <strong>IM</strong>C and will be the benchmarked<br />

professional level for those working in the industry.<br />

This will be the first global investment migration<br />

course of its type at this level. Therefore,<br />

specific entry requirements will apply. Those<br />

who successfully complete the programme will<br />

be awarded the <strong>IM</strong>C Diploma in Investment<br />

Migration.<br />

Finally, the <strong>IM</strong>C Postgraduate Diploma in<br />

Investment Migration will be a specialist qualification<br />

designed for senior practitioners working<br />

in, associated with or who aspire to work within,<br />

the investment migration industry. It will be<br />

studied over a 12-month period. This will be<br />

the flagship qualification of the industry. It will<br />

combine academic rigour with a practical and<br />

applied approach. It is designed for those senior<br />

managers who will lead the industry into its next<br />

phase of development. Therefore, more strict<br />

entry requirements will apply. On completing<br />

the Postgraduate Diploma, applicants will be<br />

awarded the highest level of professional membership<br />

awarded by the <strong>IM</strong>C: Fellowship. n<br />

22


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

Jacqueline Gauci, Administration Officer of the <strong>IM</strong>C<br />

New Membership Structure for a<br />

Stronger<br />

Industry<br />

Jacqueline Gauci of the Investment<br />

Migration Council (<strong>IM</strong>C) outlines the<br />

association’s new membership structure.<br />

Can you give us an overview of the new membership structure?<br />

The new membership structure is a solid commitment to further<br />

professionalise the association and consequently, the entire investment<br />

migration industry. It is also a commitment to standardising<br />

the investment migration industry through a portfolio of education<br />

and training programmes, which are being launched gradually.<br />

There are now five membership tiers for individuals: Student,<br />

Academic, Associate, Professional, and Fellow. There are two<br />

pathways to <strong>IM</strong>C membership: the education route or the experience<br />

route. It is planned that eventually the experience route will<br />

be phased out, and the membership journey will only be possible<br />

through the education route, except for Fellows.<br />

Can you tell us a bit more about the two routes?<br />

The journey through membership with the education route is the<br />

recommended one, since this is expected to significantly strengthen<br />

the skills and knowledge of members and by consequence the<br />

wider industry. The first step will be the Certificate in Investment<br />

Migration, which is intended as an online course with a multiplechoice<br />

test at the end. This will lead to Associate membership<br />

of the <strong>IM</strong>C. The second step will be the Diploma in Investment<br />

Migration that will lead to Professional membership, and the final<br />

step will be the Post Graduate Diploma in Investment Migration,<br />

which will lead to Fellow membership. On completion of each<br />

course, graduate non-members of the <strong>IM</strong>C will be encouraged to<br />

join the <strong>IM</strong>C based on their educational achievement. They will be<br />

recognised in the industry by the course designation and membership<br />

tier they belong to.<br />

To follow suit with other professional bodies, membership by<br />

experience will be offered to those practitioners who meet the necessary<br />

criteria in any membership tier to be members of the <strong>IM</strong>C.<br />

Furthermore, there are two membership tiers for companies:<br />

Corporate and Corporate PLUS. These remain unchanged.<br />

Why did you feel the need to change the membership model?<br />

Given the current level of scrutiny of the industry, we felt there was<br />

a pressing need for the investment migration industry to demonstrate<br />

that it can self-regulate and conduct itself in an appropriate<br />

and professional manner. The introduction of the education route,<br />

coupled with the launch of the education and training division,<br />

supports our drive to enhance the industry’s standards.<br />

How will these changes affect existing members<br />

and what requirements do new applicants need<br />

to fulfil in order to become <strong>IM</strong>C members?<br />

The current nearly 500 members within the <strong>IM</strong>C will retain their<br />

<strong>IM</strong>CM designation and be part of the Professional membership<br />

tier where they will receive additional benefits. Those members<br />

who have been with the <strong>IM</strong>C for five consecutive years and have<br />

over 10 years’ experience will be encouraged to join the highest tier<br />

of Fellow membership.<br />

Can you summarise the benefits of being an <strong>IM</strong>C member<br />

for those who are not yet part of your organisation?<br />

The strength of the <strong>IM</strong>C comes from its members. Members enjoy<br />

benefits in terms of getting access to professional development opportunities,<br />

training and education, networking, and information<br />

services provided by the association. The above benefits enhance<br />

the image of the industry and promote professionalism and high<br />

ethical standards. Being part of the leading global association concerned<br />

with investment-related migration will support companies’<br />

efforts to keep up-to-date on latest trends and developments in the<br />

field. Corporate membership is also available with the additional<br />

benefit of displaying the <strong>IM</strong>C membership logo on corporate marketing<br />

collateral and online media.<br />

What new initiatives do you have in the pipeline<br />

that members should be aware of?<br />

With the launch of the Certification in Investment Migration – at<br />

our annual Forum held in Geneva in June <strong><strong>20</strong>19</strong> – the industry sees<br />

an overnight transformation. This entry-level course, designed to<br />

be studied over six months, is the first global investment curriculum<br />

of its type, and it is specifically designed for those working in<br />

this industry. The course is taught online through our learning<br />

management system and offers a total of five compulsory modules.<br />

The certification has been engineered to prepare participants for<br />

work in a changing, vibrant industry where the highest professional<br />

standards, ethical values and enhanced competencies are<br />

not just encouraged, but required.<br />

Do you have a final message you’d like to share with<br />

your current and potential members about the <strong>IM</strong>C?<br />

The professionalisation of the industry via entry to the <strong>IM</strong>C by<br />

formal qualifications and experience is intended to be a cornerstone<br />

of responsible growth and development for the future. We<br />

expect that those working in the field and those evaluating the<br />

status and value of the investment migration industry will welcome<br />

the formal <strong>IM</strong>C qualifications. n<br />

23


<strong>IM</strong><br />

INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

DR Juerg Steffen, CEO of Henley & Partners<br />

Investment<br />

Migration:<br />

The New<br />

Normal<br />

With 30 years of experience in<br />

financial services and as a former<br />

private banker, Juerg Steffen<br />

knows what effect regulation<br />

can have on the dynamics<br />

of a sector. The new CEO of<br />

Henley & Partners believes that<br />

consolidation will be inevitable,<br />

but that it will also drive substandard<br />

operators out of the<br />

market and help normalise the<br />

investment migration industry<br />

in the minds of international<br />

institutions and the public at large.<br />

As the newly appointed CEO of<br />

Henley & Partners, Dr Juerg<br />

Steffen certainly has big shoes<br />

to fill, following Dr Christian<br />

H. Kälin, who was previously<br />

at the helm of the firm. Kälin,<br />

who retains his position as<br />

Group Chairman, has transformed a small firm<br />

of wealth advisers into one of the top investment<br />

migration firms in the world. Steffen has<br />

ambitious growth targets, however. He has set<br />

his sights on further developing the firm by entering<br />

new markets, including a move into Latin<br />

America, and shaping the entire investment migration<br />

industry by playing an active role in realising<br />

regulatory standards both for agents and for<br />

government programmes.<br />

Next Stage of Growth<br />

After more than <strong>20</strong> years in the private banking<br />

sector, Steffen joined Henley & Partners to set up<br />

its Singapore office in <strong>20</strong>13 and quickly made his<br />

presence felt in the investment migration world.<br />

“At that time, we were the first firm to look at<br />

Southeast Asia, which then became one of our<br />

most important markets,” says Steffen. Once he<br />

had established the office in Singapore, offices in<br />

Malaysia, Vietnam, Thailand and the Philippines<br />

followed. In <strong>20</strong>16, he moved back to Vienna to<br />

take on the role of COO before eventually becoming<br />

CEO at the beginning of <strong><strong>20</strong>19</strong>.<br />

Steffen is taking the lead at Henley &<br />

Partners at an exciting time in the industry’s development.<br />

“Investment migration is entering a<br />

new phase, emerging from its niche and some-<br />

24


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

times misconstrued position and establishing<br />

its place in the mainstream.” Investment migration<br />

as a whole has experienced extraordinary<br />

development over the past 10 years. Henley &<br />

Partners estimates that today there are over<br />

60 active programmes around the world, with<br />

about 30 of those being relevant and successful.<br />

“This remarkable forward momentum gives no<br />

indication of slowing down. Indeed, investment<br />

migration programmes are growing in popularity<br />

both for investors and for states looking to<br />

strengthen and diversify their economies and<br />

create new opportunities for their people,”<br />

Steffen says.<br />

The figures speak for themselves. Investment<br />

migration is widely credited with having brought<br />

approximately €25 billion in foreign direct investment<br />

into EU countries alone since <strong>20</strong>10, and<br />

“residence- and citizenship-by-investment programmes<br />

have been fundamental to several of<br />

these countries’ economic recoveries following<br />

both the global financial crisis and the European<br />

sovereign debt crisis,” Steffen mentions.<br />

He has no doubt that more countries will<br />

launch investment migration programmes,<br />

and that the industry will gain even wider acceptance.<br />

“When the first programmes were<br />

launched in the Caribbean, there was strong<br />

opposition. However, over the years, people<br />

have come to recognise the benefits of the programmes,<br />

and their existence has become the<br />

new normal. I believe the same will happen in<br />

Europe, and that we are likely to see the introduction<br />

of many more European programmes<br />

in the coming years.”<br />

Resetting a Reputation<br />

Although it occupies an increasingly established<br />

place in the mainstream, investment migration<br />

continues to be somewhat misunderstood<br />

in some circles, as the sector’s increased visibility<br />

has attracted a higher level of scrutiny by the<br />

media, policy-makers and the wider public. “This<br />

heightened focus, and a number of recently published<br />

reports drawing attention to investment<br />

migration in general, has in some cases resulted<br />

in an unwarranted negative perception of the<br />

industry,” Steffen says. As an industry leader,<br />

Henley & Partners is playing an active role in addressing<br />

this “largely unfounded perception”.<br />

Steffen explains that over the past <strong>20</strong> years,<br />

Henley & Partners has invested significant time<br />

and capital in creating a corporate structure<br />

that is wedded to best practice governance and<br />

the highest levels of due diligence, even before<br />

passing a client over for the consideration of<br />

a sovereign state. “We have always advocated<br />

making these strict standards of security and due<br />

diligence compulsory in order to further improve<br />

business practices in investment migration,”<br />

Steffen clarifies. He notes that despite Henley<br />

& Partners’ numerous calls for constructive dialogue<br />

with all stakeholders, limited communication,<br />

particularly with institutions such as the<br />

European Commission, is one of the reasons the<br />

“Investment<br />

migration<br />

programmes<br />

are growing in<br />

popularity both<br />

for investors and<br />

for states looking<br />

to strengthen<br />

and diversify<br />

their economies<br />

and create new<br />

opportunities for<br />

their people.”<br />

industry has historically been misunderstood. As<br />

Steffen observes however, the situation is changing,<br />

as communication with all relevant stakeholders<br />

improves.<br />

Regulation and Consolidation<br />

In addition to setting up its own due diligence<br />

procedures and processes, Henley & Partners has<br />

repeatedly called for regulation of the sector and<br />

will continue to do so. Steffen reiterates that “the<br />

time has come to implement a regulatory framework<br />

that will ensure that only those committed<br />

to the highest standards of governance and due<br />

diligence can operate within the industry”. He is<br />

convinced that this will drive many sub-standard<br />

operators out of business and fuel the consolidation<br />

of the industry.<br />

“I am pretty sure the investment migration<br />

industry will follow the asset management sector<br />

in this aspect. When I started in private banking<br />

at the age of 19, there were many small operators<br />

in the industry, staffed by just two or three people.<br />

However, as regulations were progressively implemented,<br />

it became almost impossible to run a<br />

small-scale operation. Today, any asset management<br />

operation needs at least 10 to <strong>20</strong> people to<br />

ensure proper compliance,” Steffen explains.<br />

Dr Juerg Steffen is the Chief<br />

Executive Officer of Henley<br />

& Partners. Juerg has over 30<br />

years’ experience in the financial services<br />

industry and is widely regarded as a leader<br />

of the investment migration industry.<br />

After joining Henley & Partners in <strong>20</strong>13<br />

to set up the firm’s Singapore office, Juerg<br />

went on to establish Henley & Partners as a<br />

key player in what has become one of the<br />

industry’s key regions. Later appointed Chief<br />

Operating Officer of the group, Juerg has<br />

played a pivotal role in growing the firm and,<br />

indeed, the investment migration industry at<br />

large, improving Henley & Partners’ operational<br />

standing and developing key structures and<br />

processes that enable the firm to keep the<br />

industry-leading position it enjoys today.<br />

Before joining Henley & Partners, Juerg was<br />

a personal advisor in the family office of one of<br />

Europe’s wealthiest families. Prior roles include<br />

serving as a member of the management board<br />

and head of the Wealth Planning department<br />

of a leading private bank in Austria. Juerg<br />

has also been a Director in the Cross-Border<br />

Wealth Planning department of UBS in Zürich,<br />

where he advised high-net-worth individuals<br />

and key clients in complex matters regarding<br />

financial, tax, succession, and residence and<br />

citizenship planning. He has also established<br />

and developed a private bank operation for<br />

one of the leading banks in Switzerland and<br />

is the editor of the definitive books on HNW<br />

relocation to Austria and Switzerland.<br />

25


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Open to Opportunity<br />

While Henley & Partners is looking for takeover<br />

targets, the firm is not yet acting as an active<br />

consolidator. Steffen mentions that Henley &<br />

Partners established an M&A department two<br />

years ago, hoping that further growth could be<br />

achieved by finding firms that it could cooperate<br />

or merge with. However, only a handful of firms<br />

were identified that were of interest to Henley &<br />

Partners, and the owners of those firms did not<br />

want to sell. “For the time being, we realised<br />

that it is better for us to open new offices to get<br />

into new markets. We are obviously still looking<br />

around,” Steffen says.<br />

Henley & Partners has enjoyed years of constant<br />

growth, and today has offices in some 30<br />

countries around the globe. “Because our clients<br />

wish to have a point of contact once they arrive<br />

in a new country, we have offices in all countries<br />

whose programmes we promote,” Steffen says.<br />

In terms of future expansion, Steffen notes<br />

that Africa is an interesting growth market.<br />

Henley & Partners already has two thriving<br />

offices in South Africa, and the firm is in the<br />

advanced stages of opening fully fledged offices<br />

in two additional key markets on the continent.<br />

Steffen’s other big plans relate to Latin America.<br />

“This is the only region where we are not yet<br />

active. We are definitely planning to change that<br />

in the coming years,” he says.<br />

“Investment<br />

migration<br />

is widely<br />

credited with<br />

having brought<br />

approximately<br />

€25 billion in<br />

foreign direct<br />

investment into<br />

EU countries<br />

alone since<br />

<strong>20</strong>10.”<br />

Advancing the Global Discourse<br />

As the CEO of one of the leading firms in the<br />

sector, Steffen is also keen to shape the discourse<br />

on issues of global importance and to continue<br />

to play a role in contributing to a more interconnected<br />

and more tolerant world. “We have a<br />

shared global responsibility to address the imbalances<br />

created by deepening globalisation. It<br />

is increasingly clear that we must find innovative<br />

ways of approaching sovereign funding and<br />

public finance. For countries trapped in a pattern<br />

of negative debt, the near impossibility of breaking<br />

the cycle via traditional methods means that<br />

the problem is sometimes met with defeat or resignation,”<br />

he explains. Steffen observes that the<br />

investment migration model is a highly effective<br />

and revolutionary means of addressing this pervasive<br />

issue.<br />

Steffen argues that the industry has an unmatched<br />

capacity to expand a state’s ‘sovereign<br />

equity’ by enlarging the number of citizens<br />

who actively contribute to its future well-being<br />

and insulate it from the ramifications of external<br />

debt restructuring. “From the Caribbean to<br />

Malta, there is mounting evidence that sovereign<br />

equity, made possible through investment migration,<br />

is a ground-breaking approach to ensuring<br />

ongoing economic growth and prosperity, and a<br />

long-term positive solution to the persistently destructive<br />

problems caused by bad debt cycles and<br />

limited inbound investment,” he says.<br />

It is a solution, Steffen says, that injects new<br />

liquidity into an economy, creates sustainable<br />

income streams that can support public financial<br />

needs, attracts much-needed foreign direct<br />

investment, and provides greater national autonomy<br />

and prosperity for all citizens. According to<br />

Steffen, investment migration has the potential to<br />

transform the way sovereign states and the wider<br />

geopolitical and financial communities conceptualise<br />

sovereign funding, foreign direct investment,<br />

and public finance. “We look forward to<br />

supporting countries around the world as they<br />

adopt this innovative sovereign funding model,”<br />

he says.<br />

Towards the Future<br />

Steffen points out that the recent launches<br />

of citizenship-by-investment programmes in<br />

Montenegro and Moldova are the latest in a<br />

string of examples illustrating that sovereign<br />

states around the world increasingly view these<br />

programmes as a sustainable and vital form of<br />

foreign direct investment, one that results in<br />

greater long-term prosperity for countries and<br />

their people. “I have no doubt that more countries<br />

will soon follow suit, and that the investment<br />

migration industry’s performance will<br />

continue to exceed all expectations in the year<br />

ahead,” Steffen says.<br />

He is certain that the industry will continue<br />

to change, evolve, and transform itself to meet<br />

the needs and demands of global investors and<br />

sovereign states and their people. “Investment<br />

migration is a multi-billion-dollar industry that<br />

drives significant liquidity streams and creates<br />

real societal value. We believe that its continuing<br />

growth will drive the industry towards<br />

regulation, and that this should be welcomed.<br />

Persistent growth will also result in an increasing<br />

number of states around the world experiencing<br />

the significant benefits that are derived<br />

from hosting prudently managed citizenshipor<br />

residence-by-investment programmes that<br />

drive investment without adding to the burden<br />

of debt.” n<br />

26


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Austin T. Fragomen Jr., Chairman and Partner at Fragomen<br />

Diversify<br />

to Grow<br />

Fragomen is widely seen as the leading<br />

law firm focused on providing immigration<br />

services worldwide. How was <strong>20</strong>18<br />

for your firm and what initiatives are<br />

high on your agenda for <strong><strong>20</strong>19</strong>?<br />

<strong>20</strong>18 was a good year for Fragomen. We grew by<br />

around 10% and are now one of the biggest firms<br />

offering immigration services. We are number<br />

80 on the list of the world’s largest law firms, and<br />

in the US, we are ranked number 60. From individual<br />

private clients and small local businesses<br />

to the world’s largest companies, we offer support<br />

and advice on all immigration needs. In terms of<br />

investment migration and our private client practice,<br />

we are experiencing big movements mainly<br />

due to the changing dynamics in the mainland<br />

Chinese market. Thus far, mainland Chinese<br />

nationals very much dominated the investment<br />

migration industry, which is particularly true<br />

when it comes to immigrating to the US. Given<br />

the current difficulties and restrictions, key<br />

stakeholders in this industry are eager to reduce<br />

the reliance on the mainland Chinese market.<br />

Hence, one of our top priorities is diversification.<br />

We are further building and developing our referral<br />

networks and forging new relationships<br />

with corporate service providers, accountants,<br />

lawyers and real estate experts in a number of<br />

new jurisdictions. At the same time, we are educating<br />

potential mainland Chinese clients who<br />

may be interested in locations other than the US,<br />

since we offer immigration services into over 150<br />

countries.<br />

Geographically, where exactly<br />

are you planning to expand?<br />

Titan of industry is not a term that is easily attributed.<br />

Austin Fragomen could lay claim to this title, but<br />

it is certainly nothing he would ascribe to himself.<br />

However, with more than 4,<strong>20</strong>0 employees, offices<br />

in almost 30 countries and a ranking as one of the<br />

top 60 legal firms in the US, it is a title that sits easily<br />

with someone of his calibre. The <strong>IM</strong> <strong>Yearbook</strong><br />

spoke to him about the major trends currently<br />

influencing the investment migration industry and<br />

how the sector will evolve over the next years.<br />

India is interesting; it is a massive market. We are<br />

very well connected in India because on the corporate<br />

side of our business we already represent<br />

a number of major companies, particularly in<br />

the Indian IT space. We have around 500 people<br />

working for us in India, and are the dominant<br />

service provider in that space. So we work off<br />

our considerable contacts and organise seminars<br />

in different cities and so forth. In general,<br />

we are particularly interested in Southeast Asia.<br />

We have been doing a lot of marketing not only<br />

in Vietnam, Indonesia and Thailand but also<br />

in Malaysia, which has a very interesting programme<br />

based on real estate. We have an alli-<br />

28


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

ance with a very strong regional law firm based<br />

in Kuala Lumpur with offices in many southeast<br />

Asian countries. In addition, we consider South<br />

Africa an interesting market, and we continue to<br />

do a lot of business in South America, particularly<br />

in Brazil and Mexico.<br />

Some say Africa is the rising star<br />

of the future. Do you agree?<br />

In Africa you have many developing nations and<br />

some interesting frontier markets, such as South<br />

Africa and Nigeria, which are further along and<br />

interesting. But is the whole of Africa the way to<br />

the future? I don’t think so.<br />

In terms of your marketing efforts, are<br />

digital channels playing an increasingly<br />

important role in acquiring clients?<br />

I still think that the traditional referral networks<br />

will remain the main channel to generate new<br />

business as opposed to digital media. Word of<br />

mouth still resonates with high-net-worth individuals<br />

and their advisory network.<br />

There is a general anti-immigration trend<br />

that is currently permeating immigration policy<br />

around the globe. The bottom line is that countries<br />

are becoming more restrictive, and programmes<br />

will most likely become more expensive.<br />

Take the USA’ EB-5 visa as an example.<br />

There are executive branch proposals that the<br />

investment threshold should be raised from<br />

$500,000 to $1.35 million. This means investment<br />

migration will not remain as attractive to the<br />

mass affluent market as it is today. The industry<br />

will lose those successful middle-class mainland<br />

Chinese clients who have really driven the<br />

market so far. In my opinion, the client profile<br />

will change, and the focus now and in the future<br />

needs to be on attracting high-net-worth and<br />

ultra-high-net-worth individuals, as those will<br />

be the clients who will continue to afford these<br />

programmes. This changing client profile also<br />

affects our marketing measures. We are dealing<br />

with more sophisticated, wealthier people, and<br />

attracting them through social media is not going<br />

to work.<br />

There are a number of programmes that are<br />

using price as a lever to attract a broader<br />

spectrum of applicants. Do you think these<br />

programmes will be an attractive choice<br />

for candidates of more modest means?<br />

The US and the UK are still among the top destinations<br />

for many of our clients. However, we have<br />

seen numbers drop for the UK programme since<br />

the investment threshold was raised a few years<br />

ago. So, yes, we are definitely seeing the emergence<br />

of a second tier; programmes such as those<br />

of Malta and Cyprus are receiving a lot of interest.<br />

These countries might not be a client’s first<br />

choice, but they make a lot of sense if the goal is<br />

to get access to the European Union.<br />

Austin<br />

Fragomen<br />

is Founder<br />

and Chairman of the<br />

Executive Committee for<br />

Fragomen, one of the<br />

world’s leading law firms<br />

dedicated exclusively<br />

to immigration services<br />

worldwide. Established<br />

in 1951, Fragomen has<br />

grown from a respected<br />

domestic US immigration<br />

law practice to a truly<br />

global organisation.<br />

Austin has served as<br />

staff counsel to the US<br />

House of Representatives<br />

subcommittee on<br />

immigration, citizenship<br />

and international law and<br />

as an adjunct professor of<br />

law at New York University<br />

School of Law. Also,<br />

he has testified before<br />

Congress on a range of<br />

immigration issues and<br />

before the immigration<br />

sub-committees of the<br />

House and Senate to<br />

share his knowledge on<br />

a variety of business<br />

immigration issues.<br />

Then there are a number of countries with<br />

much lower entry requirements, but I would<br />

argue that they are also less desirable destinations<br />

for most. I am not convinced that getting<br />

citizenship of a Pacific island nation is going to<br />

be the best solution, especially not if visa-free<br />

travel is the main objective. One of the other<br />

big developments that we are seeing is that international<br />

organisations such as the EU and<br />

the OECD have come out against economic citizenship<br />

programmes. The question remains if<br />

and what actions will follow. Would the EU for<br />

instance curtail visa-free access for individuals<br />

from certain countries? This would definitely be<br />

a game changer.<br />

What would you highlight as the other<br />

most noticeable trends at the moment?<br />

The hot news is the emergence of entrepreneur<br />

programmes, which are becoming increasingly<br />

popular. However, the problem in my opinion is<br />

that no one has really defined what an entrepreneur<br />

is. What happens to an entrepreneur should<br />

the business not take off? Then you just have<br />

another immigrant who doesn’t have any money.<br />

There are obviously ways to deal with it, including<br />

granting only provisional residency rights<br />

until such time the entrepreneur proves his/<br />

her business is successful. I think some of these<br />

entrepreneur programmes need to be tweaked<br />

a little. However, there is certainly a market for<br />

those programmes.<br />

On the other hand, I think the political<br />

support for anything that includes ‘buying<br />

status’, and particularly passports, is decreasing.<br />

There is too much negativity around that, and<br />

I think it will be difficult to get new citizenship<br />

programmes off the ground. I believe new programmes<br />

will be leaning more towards residency<br />

rather than citizenship. In addition, more programmes<br />

will be designed to create employment<br />

and economic activity, while programmes just<br />

requiring a cash donation to government will be<br />

harder to justify in the future. The political environment<br />

is more frightening than many people<br />

may realise. That is true for migration in general.<br />

The number of migrants in the world keeps<br />

growing due to issues such as poverty, famine,<br />

economic crisis, wars and so forth. The rhetoric<br />

surrounding these issues has definitely created a<br />

negative climate, and this has a real effect on the<br />

entire industry.<br />

What is your outlook for the investment<br />

migration industry over the next five years?<br />

Despite the difficulties we talked about, I am still<br />

bullish on the market for this type of investment.<br />

It is positive that there are presently more people<br />

interested in these programmes than there were a<br />

few years ago. I also believe the high demand for<br />

these programmes will be a counterforce to the<br />

more restrictive trend that we are witnessing, and<br />

it will ultimately drive government policy. n<br />

29


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Zac Lucas, Founder of Centenal Pte Ltd.<br />

Taxing Times:<br />

Why the OECD<br />

Didn’t Get it Right<br />

Zac Lucas talks about<br />

the Common Reporting<br />

Standards, the OECD’s<br />

blacklist and the need to bring<br />

immigration consultants<br />

into the regulatory fold.<br />

How would you describe the current<br />

environment and tax implications for highnet-worth<br />

individuals and their advisers?<br />

High-net-worth individuals are on the radar of<br />

tax authorities around the world, and they have<br />

to navigate a difficult and complex landscape<br />

since the introduction of the OECD’s Common<br />

Reporting Standard (CRS). Many wealthy individuals<br />

who are doing business internationally<br />

are facing the issue that they are involved in<br />

structures that are not recognised by tax authorities<br />

in their home countries. For instance, many<br />

civil law countries do not recognise the concept<br />

of a trust, which then in turn creates significant<br />

issues once that information is reported under<br />

CRS to the tax authorities. In addition, affluent<br />

individuals are sometimes advised to set up<br />

certain structures and are told that these are not<br />

reportable, but this might not always be true.<br />

On the advisory side, the situation is equally<br />

complex. The proposed Mandatory Disclosure<br />

Rules (MDR), designed to supplement the CRS,<br />

are intended to be retroactive, and the OECD has<br />

put October <strong>20</strong>14 as the start date. This means<br />

that a lot of the activities that happened in the<br />

run-up to the implementation of the rules will<br />

need to be looked at. One suggested method of<br />

enforcement would involve a name and shame<br />

mechanism, which would be a threat to the professional<br />

reputation of advisers. This could easily<br />

result in advisers being taken aside by government<br />

officials when they fly in to see their clients,<br />

based on prior MDR reports. It is now becoming<br />

a personal security issue for tax advisers. In my<br />

opinion, we have seen a rollout of mass surveillance<br />

measures, and the CRS is one of them, supplemented<br />

of course by the proposed MDRs.<br />

“One suggested<br />

method of<br />

enforcement<br />

would involve a<br />

name and shame<br />

mechanism,<br />

which would<br />

be a threat to<br />

the professional<br />

reputation of<br />

advisers.”<br />

All of this should be viewed in the context<br />

of the big privacy push that is going through the<br />

EU at the moment, including the General Data<br />

Protection Regulation (GDPR). The GDPR and<br />

the CRS are complete opposites, and not easily<br />

compatible. It is ironic that the OECD was the<br />

organisation that actually championed privacy<br />

guidelines in the early 1980s, but they seem to<br />

have forgotten about that. The European Court<br />

of Justice (ECJ) has already ruled against an infringement<br />

in privacy with respect to police retention<br />

of records, and I am almost certain that<br />

should there be a case ‘GDPR versus CRS’, the<br />

OECD will have to significantly amend the CRS<br />

rules.<br />

In your opinion, can residence and citizenship<br />

programmes potentially be used to<br />

misrepresent an individual’s jurisdiction of tax<br />

residence and endanger the proper operation<br />

of the CRS due diligence procedures?<br />

The CRS is filled with loopholes, and there are<br />

much simpler methods for individuals who<br />

want to circumvent the CRS to use than misuse<br />

of a residence and citizenship scheme. I’ll give<br />

you an example. The CRS contains an “Active<br />

NFE” classification (Active NFE means an<br />

entity that holds a financial account where the<br />

relevant financial institution cannot report the<br />

ultimate beneficial owners of the entity), termed<br />

a “Start Up” Active NFE. Account holders may<br />

take advantage of this classification in order to<br />

avoid reporting under the CRS for a period of<br />

up to two years, when in fact they never had a<br />

real intention to start a business. The other area<br />

of abuse, which some think is rampant at the<br />

moment, involves the misuse of what is termed<br />

“Managed Investment Entities”, which are typically<br />

owner-managed personal investment companies<br />

that grant some discretionary portfolio<br />

management to either a bank or external asset<br />

manager. A Managed Investment Entity is not<br />

subject to CRS reporting by the various banks<br />

and/ or assets managers that are connected to<br />

the entity. Instead, the Entity itself is supposed<br />

to do its own reporting, which some believe is<br />

not then occurring.<br />

30


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

But do you believe it is possible to use<br />

the residence route to circumvent tax?<br />

In my opinion it is very difficult. We now have<br />

the OECD’s high-risk jurisdiction list, and most<br />

countries that are involved in the investment<br />

migration industry are on that list. If clients<br />

from any of these jurisdictions seek to open a<br />

financial account, a modestly trained compliance<br />

team will be difficult to fool. The moment<br />

the client produces proof of residency from<br />

any of those jurisdictions, some fundamental<br />

questions will be asked. Some three or four<br />

years ago, the situation might have been different,<br />

but today the large banks are very careful<br />

and actively protect their reputation. To make<br />

it through, high-net-worth individuals would<br />

have to build up a chain of collusion that includes<br />

their bankers, lawyers, advisers and so<br />

on. However, ultra-high-net-worth individuals<br />

are not putting themselves in such a precarious<br />

position, and high-net-worth and mass affluent<br />

individuals simply don’t have the resources to<br />

achieve this level of collusion.<br />

So why is it that the investment migration<br />

industry and high-net-worth clients<br />

are being discussed in this context?<br />

Here we need to talk about the sloppiness of the<br />

industry. The industry is made up of a lot of advisory<br />

firms. They seem to know their own jurisdiction<br />

very well but they might not be familiar<br />

with the legal implications in other countries.<br />

Furthermore, while there are many knowledgeable<br />

advisers, there are still some ‘cowboys’ in<br />

the industry who might not even ask what the<br />

true intention of the applicant is, or the underlying<br />

purpose.<br />

Besides, in many markets the immigration<br />

adviser is not necessarily the first point of<br />

contact for high-net-worth individuals. Let’s<br />

look at China or India. These countries do not<br />

have open markets; you don’t get in that easily,<br />

unless you are a brand. So consultants need to<br />

network their way through to be introduced to<br />

a high-net-worth family. The immigration specialist<br />

might be the third or fourth supplier that<br />

these families get introduced to. This also means<br />

that in many instances the immigration consultant<br />

just doesn’t know what happens next, and<br />

why a residence or passport was sought.<br />

What’s your suggestion to address this issue?<br />

The industry needs to bring immigration specialists<br />

into the regulatory fold, where this is not yet<br />

the case. I don’t think self-regulation will work,<br />

due to the lack of enforcement power. Once consultants<br />

are regulated and subject to Anti-Money-<br />

Laundering laws, many of the current issues will<br />

disappear.<br />

Zac Lucas is<br />

the Founder of<br />

Centenal Legal<br />

Technology Group. Zac is a<br />

practicing lawyer with over<br />

<strong>20</strong> years legal experience,<br />

admitted to practice in<br />

England and Wales, and is<br />

a former Partner of various<br />

international law firms<br />

advising on all areas of<br />

international private client<br />

law. Zac has particular<br />

expertise in relation to the<br />

OECD Common Reporting<br />

Standard (CRS). He has<br />

been engaged by a number<br />

of leading private banks,<br />

trust companies, wealthy<br />

individuals and families, and<br />

a governmental authority,<br />

to advise on the practical<br />

implementation of the CRS.<br />

What’s your outlook for the industry?<br />

I think we will see more regulation. We need to<br />

keep in mind that there are two things that don’t<br />

win any votes: being soft on terrorism and being<br />

soft on high-net-worth individuals. So it might<br />

become a lot harder to access EU countries in the<br />

future, and I think things like a simple speeding<br />

fine will be held against applicants. We might<br />

also see a curtailing of certain benefits, such as<br />

visa-free travel, that these programmes offer. I<br />

would not be surprised if the Caribbean countries<br />

that are currently enjoying access to the<br />

European Union might not get these kind of<br />

perks in the future. However, all of this depends<br />

on whether the industry will experience continuous<br />

scandals. From a tax perspective, the future<br />

is more uncertain as a lot of the issues that I have<br />

flagged have yet to hit the market. Tax authorities<br />

around the world are only now waking up<br />

and starting to understand the information they<br />

have received from the CRS process, and deciding<br />

how they should react to it. A major game<br />

changer would be if non-financial assets, such<br />

as land and property, would be included in the<br />

CRS. Many ultra-high-net-worth individuals are<br />

currently investing in these asset types, basically<br />

transforming reportable capital into non-reportable<br />

capital. n<br />

31


<strong>IM</strong><br />

INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Bob Kraft, President of IIUSA<br />

Time for<br />

Renewal<br />

America’s EB-5 Programme has been the most successful immigrant<br />

investor programme in the world. However, a series of short-term<br />

extensions and the constantly growing quota backlog mean its<br />

future remains uncertain. The <strong>IM</strong> <strong>Yearbook</strong> spoke to Bob Kraft,<br />

President of Invest in the USA (IIUSA), the industry trade association<br />

of the EB-5 Regional Centre Programme, about the way forward.<br />

32


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

n increase to 50,000 investor visa<br />

units and a rise in the minimum<br />

investment amount to roughly<br />

$750,000 are some of the suggested<br />

changes that Bob Kraft, President<br />

of Invest in the USA (IIUSA),<br />

believes are necessary but sensible enough to<br />

ensure the future success of the EB-5 Programme.<br />

Over the years many have called for significant<br />

reforms of the EB-5, especially when it comes to<br />

the Regional Centre Programme, amid concerns<br />

about fraud. The programme has however remained<br />

unchanged, but Kraft says the potential<br />

for a thorough legislative overhaul has never been<br />

greater. “For a long time, the US industry was very<br />

fragmented in its positions, and it was only recently<br />

that we managed to find common ground that<br />

allows us to speak with one voice and drive the discussion<br />

forward,” says Kraft.<br />

30 Years Running<br />

Since its inception in the 1990s, the EB-5<br />

Programme has seen a total of <strong>20</strong> extensions,<br />

but without the much-needed reforms. The<br />

latest extension is running through to the end<br />

of September <strong><strong>20</strong>19</strong>. The EB-5 Programme is<br />

far too valuable to the US economy to simply<br />

end it. According to IIUSA, the programme has<br />

raised more than $35 billion since <strong>20</strong>08. During<br />

the federal fiscal years (FY) <strong>20</strong>14 and <strong>20</strong>15 alone,<br />

nearly $11 billion in capital investment was invested<br />

in EB-5 projects, accounting for 2% of all<br />

Foreign Direct Investment net flows to the US<br />

economy. More than 355,000 jobs were created as<br />

a result of the programme in FY<strong>20</strong>14 and FY<strong>20</strong>15<br />

alone. “During the <strong>20</strong>07/<strong>20</strong>08 downturn, EB-5<br />

money was actually responsible for a large part<br />

of economic activity because funding from the<br />

banks dried up. It is a great tool that has been<br />

very effectively used across the country,” says<br />

Kraft. He highlights that in the early days of the<br />

programme, EB-5 money accounted for as much<br />

as 100% of project funding, which then moved<br />

down to 50% of project value, and today comes in<br />

at around 25%. A whole host of projects are partly<br />

financed by EB-5 money, ranging from hotels and<br />

manufacturing plants to hospitals, schools and<br />

metro systems.<br />

Driving Reform<br />

While many within the industry have long<br />

acknowledged the need to overhaul the programme,<br />

Kraft mentions that disagreement<br />

between the various stakeholders on the way<br />

forward meant it was difficult for US lawmakers<br />

to put a package together that was acceptable to<br />

everyone. They wanted the industry to work out<br />

a solution and then come back. “One year ago,<br />

we agreed to look beyond the animosity in the<br />

industry and identify those areas where we were<br />

in agreement, compromise on issues on which<br />

we could not get together in the past, and present<br />

a united front to Congress. Since then, we are<br />

having weekly meetings with the groups that are<br />

working on new legislation.”<br />

Robert W.<br />

Kraft is the<br />

President of<br />

IIUSA’s Board of Directors<br />

and has been an active<br />

member since <strong>20</strong>07. He is<br />

also Chairman, President<br />

and CEO of FirstPathway<br />

Partners (FPP), a firm that<br />

helps foreign investors<br />

become United States<br />

citizens under Homeland<br />

Security’s EB-5 Regional<br />

Centre Programme.<br />

He has more than 40<br />

years of international<br />

business experience<br />

at the Executive<br />

and Board levels.<br />

However, bringing the industry together is<br />

not the only hurdle. As in other countries, the<br />

whole immigration debate is very emotional<br />

and “has been a political football used by both<br />

parties”. The EB-5 industry is just “a tiny piece<br />

of the overall immigration picture, although we<br />

are probably the most productive. However, disagreement<br />

on the entire immigration issue has<br />

thus far also prevented any advancement on the<br />

EB-5 front.” IIUSA is now hoping to get its bill rewritten<br />

and get Congress to tackle EB-5 separately<br />

from other immigration questions. “I am optimistic<br />

that all these efforts will lead to updated<br />

legislation,” says Kraft.<br />

Priority Areas<br />

IIUSA is targeting a six-year authorisation,<br />

“which would place the programme on very solid<br />

footing”. The number one priority is to increase<br />

the number of visas that can be issued. “Part<br />

of the problem was that the cap of 10,000 visas<br />

was interpreted in a way that family members<br />

were counted as individual visa holders. A cap<br />

of 50,000 investor visa units, combined with the<br />

proper interpretation of family members and<br />

main investors, would provide the programme<br />

with a solid runway for growth,” says Kraft.<br />

Still, there are some contentious issues. “We<br />

are not in agreement with raising the minimum<br />

investment to $1.35 million as indicated in the<br />

recent draft regulation.” While IIUSA does not<br />

contest the need to increase the required investment<br />

given that it has remained at $500,000<br />

since the programme’s inception, an increase<br />

to $750,000 or $800,000 is seen as acceptable<br />

from the industry’s point of view. US lawmakers,<br />

however, are looking to other international<br />

programmes where applicants routinely pay in<br />

excess of $1 million. Giving the standing of the<br />

US in the world, lawmakers believe the US programme<br />

should be on par, if not ahead of what<br />

other jurisdictions are requesting.<br />

Other aspects of the regulation aim to<br />

strengthen reporting standards and are putting<br />

more responsibility on regional centres to protect<br />

investors. “These elements will be beneficial, as<br />

would be a faster processing time. We also aim<br />

for more clarity with regard to the projects that<br />

qualify for funding from the programme,” says<br />

Kraft. One of the key criticisms about EB-5 is that<br />

investment is not always channelled into rural<br />

and high-unemployment areas as it was originally<br />

intended. Kraft believes that more clarity<br />

will help EB-5 to fully unleash its potential for<br />

job creation. n<br />

33


<strong>IM</strong><br />

INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Edward Beshara, Managing Partner of Beshara Global Migration Law Firm<br />

Why Strategy<br />

is Everything<br />

EB-5 has for many years been a runaway<br />

success. But with ever-increasing<br />

waiting times and long delays for some<br />

nationalities, defining the right strategy<br />

has become the most important exercise<br />

of the immigration process, says Edward<br />

Beshara, US Attorney at Law.<br />

The USA’s EB-5 Programme<br />

has long been considered the<br />

gold standard of residenceby-investment<br />

programmes<br />

in the world. However, to<br />

keep investor interest high,<br />

stability and predictability<br />

need to again become the<br />

hallmarks of the programme, says Edward<br />

Beshara of Beshara Global Migration Law Firm.<br />

“While there is definitely a need for new, modern<br />

legislation to ensure that EB-5 remains a competitive<br />

choice for high-net-worth investors now and<br />

in the future, there are also many other avenues<br />

that applicants can explore if they wish to enter<br />

the US. In fact, the EB-5 Programme might not<br />

always be the first or best choice,” he adds.<br />

Boom Years<br />

Although in existence since 1990, EB-5 experienced<br />

a boom in interest during the past 10 years<br />

following the <strong>20</strong>08 financial crisis due to a combination<br />

of factors, says Beshara. With liquidity<br />

squeezed and banks refusing to lend, US developers<br />

started promoting the programme extensively<br />

in an effort to access low-cost EB-5 funds<br />

to secure financing for their projects. Another<br />

reason for the rise in applications was the cooccurrence<br />

of Canada’s decision to phase out its<br />

federal Immigrant Investor Program. The US<br />

suddenly became the preferred destination for<br />

wealthy foreign investors, predominantly mainland<br />

Chinese nationals, seeking both economic<br />

opportunities abroad, as well as educational opportunities<br />

for their children.<br />

Regaining Competitiveness<br />

“I think in some ways the EB-5 has become a<br />

victim of its own success,” says Beshara. “The<br />

waiting time for Chinese investors is just one<br />

example of this.” Due to the annual ceiling limit<br />

of 10,000 EB-5 Conditional Resident Visas for<br />

34


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

“The USA’s EB-5<br />

Programme<br />

has long been<br />

considered the<br />

gold standard<br />

of residenceby-investment<br />

programmes in<br />

the world.”<br />

investors and their family members, and the<br />

presence of per country limits, Chinese investors<br />

today face an estimated waiting time of 14 years.<br />

He points out that applicants also need to take<br />

into account that the monthly State Department<br />

Bulletin for available visa numbers per EB-5<br />

category is different than the actual or real time<br />

delays or retrogression. Beshara also mentions<br />

that in the early days of the programme, EB-5<br />

petitions were approved in one to three months.<br />

As soon as the petitions were approved, investors<br />

could apply for their conditional residence visa.<br />

“In general, when we file a petition today, it takes<br />

about 24 months before the government comes<br />

back to us. Investors also need to factor in another<br />

five to six months until they receive their conditional<br />

green card. But as I mentioned previously,<br />

this timeframe is extended to 14 years before<br />

Chinese investors can apply for their Conditional<br />

Resident Visa.” Beshara believes that speeding<br />

up the petition and application process, as well as<br />

increasing the number of Conditional Resident<br />

Visas per year, would go a long way towards improving<br />

EB-5’s overall competitiveness.<br />

“We have to keep in mind that EB-5 is only<br />

one of many investment migration options available<br />

in the global marketplace, and at times the<br />

investment opportunities offered in other countries<br />

might sound more appealing to investors,”<br />

says Beshara. “I always point out that the EB-5 investment<br />

is 100% at risk from a business perspective.<br />

Investors and their advisers need to do their<br />

homework and look into the projects they plan to<br />

invest in and their history of success. Businesses<br />

and projects can fail, and there cannot be a guarantee<br />

that investors will get their money back.”<br />

This also applies to projects associated with a<br />

Regional Centre licence. “While investment<br />

through the Regional Centre Programme can be<br />

an EB-5 compliant project for immigration purposes,<br />

it does not mean that the US Government<br />

is approving the business viability of the project.”<br />

A Plethora of Options<br />

Although new EB-5 legislation and/or US<br />

Immigration Regulations have yet to materialise,<br />

the US has not lost its appeal to wealthy investors.<br />

“However, it is essential to find the best strategy<br />

for each client,” says Beshara. In the past, Chinese<br />

nationals accounted for 85% of EB-5 investment<br />

volume and even though their numbers have<br />

dropped, they still are in the majority per year,<br />

according to Beshara. “The majority of investors<br />

are looking for relief from the quota backlogs and<br />

for greater certainty, and there are alternative US<br />

visas to the EB-5 Programme that can be more<br />

attractive, depending on the circumstances,”<br />

he says. Many of his clients are more interested<br />

in securing educational opportunities for their<br />

children rather than a new residence location for<br />

themselves. “In these cases, it makes a lot more<br />

sense to apply for a student visa.” Another option<br />

might be to apply for an E-2 treaty investor visa,<br />

which works for citizens of countries with bilateral<br />

investment treaties with the US. The E-2 visa<br />

may be obtained in a few months, for entry of the<br />

investor and their family.<br />

He also noticed a substantial increase in the<br />

volume of citizenship by investment applications<br />

in other countries, whereby the final goal remains<br />

to enter the US. “One solution involves obtaining<br />

citizenship in the Caribbean country of Grenada,<br />

a country that has both a citizenship by investment<br />

programme and a bilateral E-2 investment<br />

treaty with the US.” Once becoming a citizen, the<br />

new Grenada citizen is eligible to apply for an<br />

E-2 investor work visa for the US. This can be a<br />

solution to fill the gap until the investor is able<br />

to apply for US permanent residence, or it can<br />

be an option instead of the EB-5 visa scenario.<br />

Obtaining citizenship in Grenada may be the first<br />

choice compared to other E-2 treaty countries,<br />

given that high-net-worth investors can obtain<br />

citizenship in Grenada in three months.<br />

Despite these alternatives, Beshara believes<br />

that new EB-5 legislation is required sooner,<br />

rather than later. “The US remains a magnet for<br />

immigrants coming from all corners of the world,<br />

but in my opinion, Congress must act fast to push<br />

through new legislation otherwise investors will<br />

start seeking other options, some of which may<br />

be outside of the United States.” n<br />

Edward Beshara is Managing<br />

Partner of BESHARA GLOBAL<br />

MIGRATION LAW FIRM based<br />

in Orlando, Florida since 1983. He has<br />

been exclusively practicing US Business<br />

Immigration Law (including the E-2 treaty<br />

investor, intra-company executive transfers,<br />

and National Interest petitions) and offering<br />

approvable strategies and solutions to<br />

foreign nationals throughout the US. He<br />

represents corporate and individual clients<br />

from all countries worldwide in regard to<br />

their US immigration goals. Edward has<br />

been representing foreign national investors<br />

and corporate clients in regard to the EB5<br />

process since 1991, and concentrating on<br />

the EB5 Regional Centre and individual<br />

EB-5 Direct process for over ten years.<br />

35


<strong>IM</strong><br />

INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Larry Wang, President of Well Trend United<br />

Inside China’s<br />

Migration Industry:<br />

Too Big<br />

to be<br />

Ignored<br />

Chinese nationals<br />

are among the<br />

top applicants<br />

for residence<br />

programmes across<br />

the world; yet, they<br />

are encountering<br />

more barriers than<br />

ever to realising<br />

their emigration<br />

plans. Larry Wang,<br />

President of Well<br />

Trend, talks about<br />

the deregulation<br />

of immigration<br />

consultants in China,<br />

the EB-5 backlog,<br />

and what Chinese<br />

clients really want.<br />

How would you describe the current<br />

immigration market in China?<br />

The good news is that demand is still very strong,<br />

despite the fact that the Chinese economy is<br />

slowing down. December <strong>20</strong>18 marked the 40th<br />

anniversary of China’s reform and openingup<br />

policy, and the appetite to go abroad by those<br />

that got rich during the past decades continues<br />

unabated. The bad news is that the government<br />

has deregulated the market. From February<br />

10th <strong><strong>20</strong>19</strong>, immigration consultants operating in<br />

China are no longer required to have a licence.<br />

My firm Well Trend has been around for 24 years,<br />

and we are now witnessing a massive influx of<br />

new start-ups.<br />

Why did China decide to drop the<br />

regulation at a time when most countries<br />

are moving towards regulating agents<br />

and service providers; and what effect<br />

will this have on the industry?<br />

I would really like to know the answer to that, but<br />

I can only guess that the Chinese Government<br />

wants to be seen as open. As I mentioned, we<br />

have seen a lot of new firms coming into this<br />

market. In one Chinese province we have seen<br />

almost 6,000 new immigration consultants starting<br />

to operate, and we estimate that in the whole<br />

of China close to <strong>20</strong>,000 new immigration consultants<br />

entered the industry since the deregulation.<br />

Among them are wealth managers, real<br />

estate companies, and even travel agents who feel<br />

they have clients interested in migration products<br />

but don’t necessarily have the required knowledge<br />

and experience in this industry. I am pretty<br />

certain that a good number of these firms, probably<br />

around 35% of the new entrants, will be gone<br />

in a few months, and the market will ultimately<br />

decide which firms are capable and therefore will<br />

survive. However, in the short term this means<br />

that clients need to choose carefully which immigration<br />

consultant they work with.<br />

How is the Chinese Government looking<br />

at the industry at the moment? There<br />

seems to have been a drive to get Chinese<br />

to invest at home rather than abroad.<br />

China is still encouraging people to go abroad,<br />

but the biggest challenge these people are currently<br />

facing are currency controls. It is not easy<br />

for Chinese high-net-worth individuals to transfer<br />

money abroad. Every Chinese individual is<br />

only allowed to transfer up to $50,000 per year<br />

36


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

out of China. Obviously, that is not enough for<br />

immigration purposes. Looking at the EB-5<br />

Programme, they need to make an investment of<br />

$500,000. That means applicants would need to<br />

find 10 people who would pool in their annual<br />

quotas for moving money overseas, or use their<br />

international network to source the funds.<br />

What countries and programmes<br />

are high on the agenda of Chinese<br />

high-net-worth individuals?<br />

For 80% of our clients the two main drivers are<br />

securing visa-free travel for business and leisure,<br />

and better education for their children, whereby<br />

many families are seeking ‘native English education’.<br />

This also explains why the US and Canada<br />

are still the top two destinations for Chinese nationals.<br />

The issue with many other programmes,<br />

especially the European ones, is that they don’t<br />

provide English-speaking educational opportunities,<br />

and hence they are not as attractive. The<br />

fact that education is the main driver also means<br />

that the main applicants don’t necessarily want to<br />

go abroad themselves.<br />

What advice do you give them in relation<br />

to EB-5 given the long waiting time?<br />

In my opinion the EB-5 programme is not the best<br />

solution for many of our clients. As I mentioned,<br />

most Chinese just want to send their children to<br />

the US to study. Many of my clients are well-established<br />

and successful entrepreneurs who want to<br />

stay in China, and they also want their children<br />

to come back to China after completing their<br />

studies. We are also pointing out to our clients that<br />

once they have obtained their visa as part of EB-5,<br />

they have to live in the US, otherwise they might<br />

lose their status if they don’t apply for a leave of<br />

absence. So I think the EB-5 programme is not the<br />

ultimate solution, and depending on the circumstances,<br />

it makes more sense to apply for a student<br />

visa for their children.<br />

How attractive are programmes<br />

in Europe to your clients?<br />

It is increasingly becoming more difficult to<br />

enter the US and Canada, so our clients have no<br />

choice other than to consider other countries.<br />

Europe is becoming more and more popular in<br />

the Chinese market. The Greek programme is<br />

very price-competitive, and saw a lot of traction<br />

last year. However, I think a lot of agents have<br />

over-promoted the programme, and this year<br />

we will not see the same momentum as last year.<br />

The numbers will be lower. However, the investment<br />

of €250,000 is very attractive to the majority<br />

of people in China. In Beijing, real estate prices<br />

are excessively high, and for the price you need<br />

to pay for an entire house in Greece you would<br />

only be able to purchase a kitchen in Beijing. I<br />

also see Portugal, even though the investment requirement<br />

is double at €500,000, as an attractive<br />

“December <strong>20</strong>18<br />

marked the 40th<br />

anniversary<br />

of China’s reform<br />

and openingup<br />

policy, and<br />

the appetite to<br />

go abroad by<br />

those that got<br />

rich during the<br />

past decades<br />

continues<br />

unabated.”<br />

Larry founded<br />

Well Trend in<br />

1994 starting<br />

with just two employees.<br />

Now Well Trend has over<br />

400 employees and offices<br />

all over China, as well as in<br />

Vancouver and Budapest.<br />

Wang is regarded as an<br />

immigration pioneer in<br />

China since Well Trend<br />

was one of the first to<br />

introduce Canadian,<br />

American, and European<br />

programmes. Wang is<br />

highly sought after for<br />

his views on immigration,<br />

having been interviewed<br />

by all major international<br />

and Chinese media outlets.<br />

He is regularly invited<br />

to speak at immigration<br />

conferences in North<br />

America, Asia and Europe.<br />

market. Several years ago, there were some problems<br />

with the programme, but I hope to see the<br />

return of the Chinese in Portugal in <strong><strong>20</strong>19</strong>, especially<br />

with the US becoming more and more difficult.<br />

Given that it is English-speaking, Ireland<br />

is also becoming an attractive option. In my<br />

opinion, Malta and Cyprus need to stabilise their<br />

programmes, also vis-à-vis the European Union,<br />

in order for them to become more attractive. In<br />

Malta, the process is also very slow, and we have<br />

some clients who have been waiting for almost a<br />

year, which is very frustrating for them.<br />

What’s the acceptable timeframe<br />

for Chinese clients?<br />

That’s an interesting question, as most clients<br />

want to get their visa as soon as possible, even<br />

though they don’t want to go immediately. Once<br />

they have their visa, they often ask me when they<br />

have to be there at the latest for it not to expire.<br />

This is an issue of trust, and therefore, they want<br />

to hold the visa in their own hands as quickly as<br />

possible. I would say that three to four months is<br />

an acceptable processing time.<br />

Many programmes are coming up with<br />

different investment options. What is the<br />

preferred investment route of the Chinese?<br />

Well, I always advise clients that they first need<br />

to focus on the immigration aspect, and not on<br />

the return on their investment. While it is not<br />

impossible to achieve both, I always tell them to<br />

prioritise immigration. Overall, I am not a big<br />

fan of the equity option and programmes that<br />

require applicants to become a shareholder of<br />

a company. This route is too complicated for<br />

them. I think a loan option is a better way; it is<br />

much more straightforward and it is also a safer<br />

investment. In terms of real estate, I am not<br />

saying the opportunity in some countries is not<br />

good, but our time and energy is limited, and we<br />

need to focus on what makes most sense to our<br />

clients.<br />

What recommendation would you make to<br />

programme operators and agents seeking<br />

to market their programmes in China?<br />

I would advise them to focus a bit more on the<br />

needs of the clients rather than their own. China<br />

is a very important market that should not be<br />

ignored. Due to the EB-5 backlog, some agents<br />

switched their attention to other markets, such<br />

as India and Vietnam, but even taken together,<br />

these markets are not as large as the Chinese<br />

market. I also feel that Chinese immigrants<br />

should be welcome wherever they go; they are<br />

very diligent, loyal and hard-working people.<br />

And I am pretty certain that the Chinese market<br />

is a lasting one that will be around for many years<br />

to come, although it is a bit difficult to ascertain<br />

which programmes will be popular in China over<br />

the coming five years. n<br />

37


<strong>IM</strong><br />

INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Martin O’Connor, CEO of Kylin Prime Group<br />

We Need to Enter an Era of<br />

“Coopetition”<br />

Successful industries thrive on having the culture and ability to compete vigorously<br />

but at the same time collaborate strategically - ‘coopetition’, and the investment<br />

migration sector is no exception, says Martin O’Connor, CEO of Kylin Prime<br />

Group. He calls for an enhanced dialogue between international institutions,<br />

countries and companies for the greater benefit of the market and society.<br />

Kylin Prime has an unusual operating<br />

model compared to many in the industry.<br />

Can you tell us a bit more about it?<br />

We have adopted a very specific model and<br />

created what we call an entire ‘ecosystem’, which<br />

means we can offer our clients holistic packages<br />

provided by different companies within the<br />

group. Kylin Prime Group is our master brand,<br />

and within that group for example, we have<br />

Kylin Prime Funds, Kylin Prime Capital, Kylin<br />

Prime Family Office and Trusts and Corporate<br />

Services; while Ousheng & Partners focuses on<br />

global mobility and RCBI programmes. These<br />

companies all work closely together focused on<br />

investment security and return on investment;<br />

ensuring that transparent investment vehicles<br />

are being used.<br />

“I believe in an<br />

environment that<br />

allows firms to<br />

compete but also<br />

to collaborate<br />

where necessary,<br />

for instance on<br />

issues that are<br />

important to<br />

help develop<br />

the industry<br />

further. ”<br />

The investment migration industry is currently<br />

under extreme pressure, with potential<br />

tax evasion, security threats and money laundering<br />

often being cited by the industry’s critics. We<br />

have set up highly regulated investment funds in<br />

key markets that our clients like to invest in, such<br />

as Ireland, the UK, Malta, Cyprus and Portugal.<br />

This means our clients are subject to financial<br />

regulation and have gone through the most<br />

stringent due diligence and KYC processes. We<br />

are also the majority shareholder of a European<br />

banking institution, which gives us the additional<br />

opportunity to offer private banking and wealth<br />

management services to our clients. Apart from<br />

that, we have established a think tank, the Future<br />

Citizen Institute, which produces research and<br />

analysis related to investment migration. We<br />

would like to see the institute evolve into a strong<br />

38


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

knowledge partner for all stakeholders in the investment<br />

migration industry.<br />

I believe in an environment that allows firms<br />

to compete but also to collaborate where necessary,<br />

for instance on issues that are important to<br />

help develop the industry further. We need to<br />

come together and support the main industry organisations<br />

so that we speak with one voice.<br />

How would you describe the state of the<br />

investment migration industry at the moment?<br />

The industry is at a pivotal moment in its young<br />

history. The sector has matured and professionalised<br />

quite a bit during the past three years, yet<br />

the case for collaboration is stronger than ever<br />

given the increased scrutiny from international<br />

institutions such as the EU and the OECD, policy-makers<br />

and the general public. The industry is<br />

now entering the shakeout period. Consolidation<br />

will be inevitable as the industry moves towards<br />

increased levels of regulation, be it in the form<br />

of government regulation or self-regulation. The<br />

key players in the marketplace are clearly supporting<br />

this direction, but this will create an environment<br />

in which smaller firms might struggle<br />

to survive.<br />

What are the top three challenges<br />

that the industry is facing?<br />

The main challenges relate to industry reputation<br />

and trust. Many people dislike the concept of investment<br />

migration from an emotional mindset.<br />

The post-Brexit Irish passport boom is a good<br />

example of this issue. Recently, Ireland has received<br />

some <strong>20</strong>0,000 citizenship applications from<br />

UK nationals of Irish heritage, and in fact there<br />

are around 6.7 million people in the UK who are<br />

eligible for Irish citizenship. I think it is fair to say<br />

that the majority of these people don’t have a real<br />

interest in Ireland. They will most likely not visit<br />

Ireland and neither will they invest in the country.<br />

However, the public at large has no problem with<br />

the fact that record numbers of Britons are now<br />

seeking Irish passports. On the other hand, when<br />

migration of high-net-worth individuals is talked<br />

about, the narrative is rarely positive, despite these<br />

people contributing enormously to the economy.<br />

This brings me to the third challenge: We have<br />

to get to the stage where the EU has a realistic<br />

view of the industry. The recent reports from<br />

the European Commission and the European<br />

Parliament both reflect a lack of understanding of<br />

how the investment migration industry operates<br />

and what economic benefits and value it brings to<br />

countries. The EU has to be open to hear the positive<br />

side of the industry.<br />

What do you think programme regulators<br />

and the industry need to do to restore<br />

public trust and set the record straight?<br />

We cannot deny that there have been instances of<br />

Martin<br />

O’Connor<br />

is the CEO<br />

of Kylin Prime Group.<br />

Highly experienced in<br />

international affairs<br />

and organisational<br />

development, he has<br />

worked in complex<br />

business, political and<br />

regulatory environments.<br />

He has led teams involved<br />

in mergers, JVs and<br />

partnerships, and coached<br />

executives from the<br />

world’s leading brands.<br />

bad practice, and it is our responsibility to clean<br />

up the industry. We need to make sure that all<br />

players adhere to ethical standards and professional<br />

behaviour at all times. Organisations that<br />

do not follow these rules should be ostracised.<br />

We, as the industry, also need to learn to work<br />

together effectively and prioritise long-term<br />

benefits over short-term gains. After all, it is our<br />

reputation that needs to be safeguarded, and I<br />

am pretty sure that companies that will continue<br />

to prioritise short-term gains over long-term benefits<br />

will fall by the wayside.<br />

So is the answer to the current situation to<br />

encourage the EU to take a more central<br />

role and oversee the industry, similar to the<br />

EU’s supervision of the banking sector?<br />

The EU is very clear in saying that the granting of<br />

citizenship and residence are national rights, and<br />

I don’t think the EU is interested in supervising<br />

the sector directly. At the moment, we are seeing<br />

that sensationalist rhetoric is shaping the debate.<br />

Investment migration is a multi-billion euro industry.<br />

It involves investment that can bring huge<br />

benefits to society and economies and also involves<br />

people’s rights. Security issues, financial<br />

crime and tax evasion seem to be areas of concern<br />

for the EU. Our industry has to be responsible in<br />

these areas but the EU, as well as the OECD, also<br />

need to be responsible in their pronouncements<br />

and intentions and not stymie something that can<br />

be so beneficial all around. It works both ways.<br />

What are the big trends in the industry<br />

that you are noticing at the moment?<br />

From the clients’ side, we are seeing a growing<br />

need for an all-encompassing investment and<br />

RCBI journey. For many ultra-high-net-worth<br />

and high-net-worth individuals, diversification of<br />

assets is the top priority, and they are interested<br />

in more than just getting a visa. The other trend<br />

is that we are seeing more programmes being<br />

introduced, and I expect this number will only<br />

increase in the coming years, as more governments<br />

recognise the benefits that countries with<br />

programmes reap.<br />

What’s your future outlook for<br />

the next five to ten years?<br />

If we can overcome the current issues and build<br />

a sustainable investment migration industry, the<br />

industry can become hugely beneficial, not just<br />

commercially to the companies involved in this<br />

sector but also for global society. I am convinced<br />

that the sector can be a catalyst for global growth<br />

and an evolution towards future citizens.<br />

Investment migration has the chance to help<br />

shape our future societies, redefine global mobility<br />

and reposition our understanding of where<br />

we are from in favour of a more fluid concept. n<br />

39


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Prof. Dr. Dimitry Kochenov - Chairman of the board of the Investment Migration Council<br />

Investor Citizenship and the EU:<br />

Zooming in<br />

on the European Commission’s<br />

ill-Informed Analysis<br />

The European<br />

Commission has<br />

no competence to<br />

regulate, and a rather<br />

poor understanding<br />

of citizenship matters<br />

and the investment<br />

migration industry,<br />

writes Dimitry<br />

Kochenov, Professor<br />

of EU Constitutional<br />

Law in Groningen,<br />

and Chairman<br />

of the <strong>IM</strong>C.<br />

In January <strong><strong>20</strong>19</strong>, the European<br />

Commission released its much awaited<br />

‘Report on Investor Citizenship and<br />

Residence Schemes in the European<br />

Union’. Given the negative attention the<br />

whole issue of selling EU citizenship and<br />

residence has been receiving from the<br />

powers that be in the European Union, lawyers<br />

and policy-makers could expect much more from<br />

the Commission’s treatment of this hugely important<br />

topic. Rather than providing a clear rulebased<br />

analysis of the potential problems and<br />

opportunities at hand, the Report, regrettably,<br />

turns against the key achievements of the Union<br />

to misrepresent EU citizenship law. Instead<br />

of measured and careful analysis, it offers an<br />

outline of a moral panic, ignoring all the positive<br />

sides and inflating the negative sides of the story,<br />

while proceeding on the false premises of archaic<br />

nationalism and ignorance of EU law. Infinitely<br />

more could be expected of the Commission, and<br />

one can only hope that this first erroneous step<br />

will not set a trend.<br />

The Report is correct on many facts it communicates:<br />

indeed, Bulgaria, Cyprus, Malta and,<br />

less systematically Austria, offer EU citizenship<br />

for investment. Moreover, <strong>20</strong> or more member<br />

states offer (permanent) residence statuses for<br />

investment, which are often convertible into<br />

citizenship of those states. To summarise: more<br />

than 70% of the member states opted for a policy,<br />

which the Commission has no direct competence<br />

to regulate, but tackles in the Report. This alone<br />

makes the Commission’s take on investment migration<br />

worth looking at in some detail.<br />

Framing investment migration<br />

Undoubtedly, there is a fundamentally important<br />

issue at hand: investment migration is capable of<br />

bringing huge gains, but also generates risks. The<br />

Commission is dead silent on the former, but<br />

is absolutely right about mentioning the latter.<br />

40


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

“The<br />

Commission’s<br />

analysis seems<br />

to be based on<br />

the assumption,<br />

which is<br />

nowhere<br />

explained<br />

or defended<br />

properly, that<br />

presence in<br />

one of the<br />

member states<br />

for a period of<br />

time before<br />

naturalisation,<br />

is likely to<br />

alleviate<br />

security risks.”<br />

to regulate this area; b) that the reality is much<br />

more complex than what its selective summary<br />

purports to demonstrate.<br />

Referring to citizenship by investment, the<br />

Commission writes that, in essence, such ‘citizenship<br />

is granted under less stringent conditions<br />

than under ordinary naturalisation regimes’.<br />

What is crucial here is to mention the differences<br />

marking citizenship law amongst all the member<br />

states to rationally accommodate the acquisition<br />

of citizenship by different categories of applicants.<br />

The sovereignty aspect of this story is also important.<br />

Starting with the latter, states are free to confer<br />

citizenship on those whom they consider qualified<br />

under the Hague Convention of Nationality (Art. 1)<br />

and, unquestionably, under EU law.<br />

EU law is funny in a way – and this is its unquestionable,<br />

pluralist strength. A US kid able<br />

to find a Greek great-great grandfather becomes<br />

an EU citizen automatically, without ever having<br />

visited Greece; a spouse of a Frenchman in<br />

Vietnam is naturalised without ever having lived<br />

in France; an EU citizen does not need to give up<br />

his or her original nationality when naturalising<br />

in Germany, unlike any non-EU nationality<br />

holder; and a Catholic dignitary retiring from the<br />

Vatican becomes an Italian, automatically and<br />

immediately. These are the groups (among, literally,<br />

countless others) that are treated by immigration<br />

and citizenship law differently in all member<br />

states. The question of what is ‘legal’ does not<br />

arise, since it is not up to the Commission to ask<br />

or comment upon. And given that international<br />

law, similarly to European Law, is clear: Member<br />

states will decide as they see fit – ius soli and ius<br />

sanguinis in this context, is, while not incorrect, a<br />

reference to nowhere. The Commission simply<br />

misrepresents the complexity of standing citizenship<br />

law and policy to mount an assault on the<br />

investment migration industry.<br />

Besides, and equally importantly, ‘ordinary<br />

conditions’ – as opposed to the frowned-upon<br />

‘less stringent’ ones – imply a level of due dili-<br />

When run in non-transparent and corrupt ways,<br />

investment migration – like any other enterprise<br />

– will certainly generate problems. In fact, the<br />

Report is such that it presents the whole issue of<br />

investment migration uniquely as a risk, rather<br />

than an opportunity.<br />

Silence on the benefits that the overwhelming<br />

majority of the member states either receives<br />

or believes to be receiving, unquestionably sheds<br />

the Commission’s work in a deeply biased light:<br />

the suggestion is that <strong>20</strong> member states are behaving<br />

deeply irrationally, which is implausible,<br />

and deeply political in the negative sense of the<br />

word.<br />

A hymn to a nationalist past<br />

The Commission claims to have discovered what<br />

citizenship is about, writing that citizenship ‘is<br />

traditionally based on … ius sanguinis and … ius<br />

soli’. This is all correct, but the Commission does<br />

not make clear that a) it does not have the power<br />

Prof. Dr. Dimitry<br />

Kochenov chairs the<br />

board of the Investment<br />

Migration Council. He holds a Chair for EU<br />

Constitutional and Citizenship Law at the<br />

University of Groningen, Netherlands. His<br />

research focuses on European citizenship<br />

and the principles of European Union law,<br />

with an emphasis on justice, democracy and<br />

the Rule of Law. His latest books include<br />

‘EU Citizenship and Federalism: The Role<br />

of Rights’ and ‘Europe’s Justice Deficit?’<br />

His newest monograph is ‘Citizenship’,<br />

forthcoming from MIT Press in the<br />

summer of <strong><strong>20</strong>19</strong>. Dimitry is a consultant<br />

for governments and international<br />

organisations in his fields of interest, and<br />

is also co-creator, with Christian Kälin,<br />

of the Quality of Nationality Index.<br />

41


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

gence, which is significantly lower than what<br />

investment citizenship promises: the entirety of<br />

one’s finances and business connections, as well<br />

as all the story of your past, would not normally<br />

be dug up by independent due diligence providers,<br />

unless you are an investor naturalising on<br />

that ground.<br />

This is only right: different applicants require<br />

different standards. The ‘context’ of citizenship<br />

acquisition, to which the Commission dedicated<br />

a whole section in its Report, is misleading: forgetting<br />

to mention ‘difference’ amounts to failing<br />

to tell a true story.<br />

Flawed reasoning rooted in<br />

obsolete authority<br />

The second main flaw of the Report is its failure<br />

to come to terms with the basic meaning of citizenship<br />

in law as an abstract legal status. Not<br />

caring about the country and its purported values<br />

will not make you less of a citizen in the eyes of<br />

the law, just as caring a lot about some officially<br />

endorsed ‘culture’ or language will not make<br />

you a citizen, unless you are named such by law.<br />

Pretending that this is not the case is deeply unhelpful.<br />

When the Commission informs us that<br />

‘the study looked for other factors … which might<br />

arguably create a link between the applicant for<br />

citizenship and the country concerned’, a citizenship<br />

lawyer reading it is puzzled. It is fundamental<br />

to realise that only citizenship can be such a<br />

link. A Tanzanian, who spent his whole life in the<br />

US and loves America, is still a Tanzanian unless<br />

US law tells us otherwise. And an American who<br />

spent his whole life in the UK – like the UK’s<br />

Boris Johnson – is still an American, liable to pay<br />

taxes and to renew his passport, no matter how<br />

little he thinks of the greedy motherland.<br />

The whole point of the text of the Report is the<br />

Commission’s apparent desire to play a somewhat<br />

totalitarian role: is this Maltese a ‘real’ Maltese?<br />

What if he has never visited the European<br />

Union? This is where the obsolete case-law of the<br />

International Court of Justice, expressly overruled<br />

by the EU’s own Court of Justice (!), comes into<br />

play: the Commission refers, quite extensively, to<br />

Nottebohm’s theory of ‘genuine links’.<br />

What the Commission’s file handlers should<br />

have not overlooked, however, is that ‘genuine<br />

links’ are incompatible with a world which is not<br />

composed of ‘genuine jails’: what the Court of<br />

Justice confirmed in Micheletti: as per Advocate<br />

General Tesauro, the ‘romantic period of international<br />

law’ is over. The Court of Justice of<br />

the European Union has expressly prohibited<br />

member states from relying on Nottebohm in<br />

dealing with each other’s nationals.<br />

References to the obsolete authority are only<br />

the start of the Commission’s puzzling campaign<br />

of putting legal reasoning to sleep. The Report essentially<br />

claims that since checking genuine links<br />

is expressly prohibited by EU law in Micheletti,<br />

member states have to ensure that such links<br />

exist. Given that Nottebohm unquestionably is<br />

bad law and the Commission was obliged to know<br />

“The Commission<br />

has been<br />

effectively telling<br />

<strong>20</strong> member<br />

states that most<br />

likely, they are<br />

doing it wrong,<br />

while enjoying<br />

no competence<br />

to regulate<br />

the field, and<br />

demonstrating<br />

rather poor<br />

command of<br />

the matter in<br />

question.”<br />

it, and taking into account the reasoning of the<br />

Commission, trying to undermine the internal<br />

market, established case-law on free movement<br />

of persons, and the rule of EU law established<br />

in Micheletti amounts, in fact, to the Commission<br />

knowingly misleading the European Parliament,<br />

the Council, the European Economic and Social<br />

Committee, and the Committee of Regions, to<br />

whom the Report is addressed. This could be an<br />

example of the violation of the duty of loyalty,<br />

should the Report be more convincing.<br />

Curious assumptions about the connection<br />

between residence, citizenship and security<br />

In the Report the Commission is looking for solutions<br />

to address the risks in terms of security,<br />

tax evasion and money laundering – all vitally<br />

relevant concerns of huge importance for the<br />

EU and the member states. In so doing, however,<br />

the Report, instead of outlining concrete problems<br />

and proposing solutions, reaches a truly<br />

esoteric level: the Commission’s analysis seems to<br />

be based on the assumption, which is nowhere<br />

explained or defended properly, that presence<br />

in one of the member states for a period of time<br />

before naturalisation is likely to alleviate security<br />

risks. In fact, numerous recent security threats in<br />

the EU were caused by first- or second-generation<br />

EU citizens who never claimed to be jetsetters<br />

or millionaires. This also undermines the<br />

appeal of the Commission’s findings akin to ‘this<br />

means that applicants can acquire citizenship<br />

of Bulgaria, Cyprus, or Malta – and hence EU<br />

citizenship – without ever having resided in practice<br />

in the member state’. The only answer is ‘Of<br />

course!’ in a situation where hundreds of thousands<br />

of EU citizens have never been to the EU<br />

in their lives, and there is no legal requirement,<br />

either in EU or in International law, to bother<br />

to visit one’s country of citizenship. A passport<br />

can also be renewed from abroad, as the Court<br />

of Justice has reconfirmed in Tjebbes, reinforcing<br />

the point that the member states, not the EU, will<br />

be deciding on the issues of conferral and withdrawal<br />

of nationality.<br />

Conclusions<br />

The Commission has been effectively telling <strong>20</strong><br />

member states that most likely, they are doing it<br />

wrong, while enjoying no competence to regulate<br />

the field, and demonstrating rather poor<br />

command of the matter in question. Many will<br />

no doubt be offended by it, while blood and soil<br />

communitarians of all sorts will cheer.<br />

Beyond the haphazard argumentation<br />

and wilful misinformation concerning citizenship<br />

in general and EU citizenship law in particular,<br />

the Report sends a very clear message:<br />

the Commission wants to regulate citizenship.<br />

Ideology and incompetence have won for now,<br />

and citizenship lawyers and scholars in all the<br />

member states will need to mobilise to shame the<br />

Commission for failing to do its job to make sure<br />

the Report in question is an exception, rather<br />

than the rule. n<br />

42


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<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Trends & Topics<br />

2O19/2O2O<br />

We run through the stories that mattered<br />

the most over the past year and explore<br />

what will likely shape the investment<br />

migration industry in <strong><strong>20</strong>19</strong> and beyond.<br />

44


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

45


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

The<br />

Good<br />

News<br />

The maturing of the<br />

investment migration<br />

industry is a cause<br />

for celebration. The<br />

industry is powering<br />

ahead and seeing positive<br />

momentum with an<br />

increasing number of<br />

programmes coming online,<br />

rising client interest and a<br />

wide array of new products<br />

that are being launched.<br />

The growth of consulting<br />

firms expanding their<br />

service offering to include<br />

investment migration is<br />

broadening the industry’s<br />

reach and equally upgrading<br />

it to a whole new level<br />

of professionalism. This<br />

is all cumulating in a<br />

feel-good factor that has<br />

all the ingredients for<br />

boom times ahead.<br />

The Great<br />

Divide<br />

With as many as 100 countries<br />

operating investment migration programmes,<br />

and still an ever-growing number of<br />

countries entering the space, it appears<br />

the appeal of the industry to governments<br />

around the world is far from waning.<br />

The most recent additions of Turkey, Jordan and Moldova are<br />

part of a growing wave of entrants who are carving out new<br />

niches in the market. In addition, Montenegro will soon join<br />

the line-up. While some programmes have global appeal,<br />

others are positioning themselves as regional hubs attracting<br />

applicants on the basis of cultural affinity, effectively creating<br />

viable micro-markets. The minimum investment required<br />

by programmes today ranges from $100,000 to more than<br />

$5 million, with the more expensive programmes appealing<br />

to ultra-high-net-worth individuals while the more affordable<br />

products remain attractive to high-net-worth and mass<br />

affluent clients. Market segmentation is becoming crucial<br />

for the industry as it progressively moves away from its onesize-fits<br />

all approach. Customers today have more options,<br />

and their choice is being influenced by their net worth as<br />

well as their geographical and generational preferences.<br />

Stability &<br />

Predictability<br />

The investment migration industry needs to embed certainty, predictability<br />

and stability in its investment environment, whereby<br />

the need for predictability is not a need for guarantees. Major<br />

shifts in the investment amounts required by programmes,<br />

U-turns in policy by governments, opaque guidance notices by<br />

programme regulators and vague assurances by agents are only<br />

some of the latest examples of the shifting sands that customers<br />

must contend with. Uncertainty inhibits long-term investments.<br />

Regulators are responsible for providing a stable and<br />

predictable regulatory environment, in which investors, agents,<br />

and customers can make long-term decisions with confidence that<br />

short-term political goals will not impact them or their families.<br />

A stable investment environment that offers simplicity, stability<br />

and predictability needs to be at the heart of everyone’s focus.<br />

Moldova<br />

TURKEY<br />

JORDAN<br />

Bullish on<br />

Blockchain<br />

Many hail blockchain<br />

technology as the<br />

best innovation<br />

since the invention<br />

of the internet.<br />

Blockchain technology<br />

has become one of the<br />

hottest topics within the<br />

industry, and many agree<br />

that the blockchain tech<br />

revolution has only just<br />

begun. More than just a<br />

distributed database for<br />

bitcoin, the technology’s<br />

ability to send, receive and<br />

store information has the<br />

underlying power to truly<br />

disrupt the status quo of<br />

the investment migration<br />

industry in the years<br />

ahead. The implications<br />

of decentralised ledger<br />

technology mean the<br />

industry could address a<br />

myriad of transparency<br />

issues and completely redesign<br />

its KYC and due<br />

diligence processes. While<br />

the technology is in its<br />

early days, it still offers a<br />

myriad of technological<br />

solutions for the industry.<br />

Regulatory compliance,<br />

instant payments, identity<br />

verification, and fraud<br />

detection, are just the tip<br />

of the iceberg; and we can<br />

expect further applications<br />

that can be implemented<br />

across the entire business<br />

operation to come online<br />

in <strong><strong>20</strong>19</strong> and beyond.<br />

46


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

80/<strong>20</strong> – The China Factor<br />

80/<strong>20</strong>, or the law of the vital few, is an interesting<br />

rule to apply to the investment migration industry.<br />

Chinese nationals account for roughly 80% of all applicants to<br />

any residence programme, with the remaining <strong>20</strong>% coming from the<br />

rest of the world. But a source of strength can also be a source of<br />

vulnerability, and the over-reliance on the Chinese market appears<br />

to be the biggest single threat to the industry. The industry’s fortunes<br />

grow and shrink with China. A simple shift or change in China’s<br />

economic policy that would lead to lower demand for investment<br />

migration products could significantly impact the industry practically<br />

overnight. Making inroads to opportunity-rich source markets such as<br />

the BRICS and N11, which include Brazil, Russia, India, China, South<br />

Africa, Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan,<br />

Philippines, Turkey, South Korea and Vietnam, which are all enjoying<br />

a level of economic resurgence, becomes key. Diversification<br />

is now the name of the game for both programmes and agents.<br />

The Birth of the<br />

Hybrid<br />

Programme<br />

The big news on the product development<br />

front is the rise of entrepreneur<br />

and start-up visa programmes as an<br />

alternative to the golden visa route.<br />

Some feel that entrepreneur and start-up visa programmes are<br />

more politically palatable than the conventional residenceby-investment<br />

programmes. However, whether or not this<br />

new generation of programmes will be the Holy Grail for the<br />

industry seems to be uncertain. The success of any programme<br />

largely depends on whether agents and service providers<br />

are promoting it. Some commentators believe that the extra<br />

time and expense required to validate a client’s business idea<br />

and develop a custom-built business plan are not making<br />

these programmes attractive enough for consultancy firms<br />

to put their full weight behind them. Besides, experience<br />

from the past has shown that most wealthy investors prefer a<br />

form of passive investment that does not require them to be<br />

personally involved in managing their investment. The solution<br />

could be the development of hybrid models that match a highnet-worth-individual’s<br />

capital with local start-ups requiring<br />

funding. The investment route can be a direct investment into<br />

a company, regulated loan funds or a national angel investor<br />

platform. The USA’s EB-5 programme, which matches foreign<br />

investors with local projects, proves that this model can work.<br />

Impact<br />

Investing<br />

Impact investing may<br />

just be a trend to<br />

some or, quite possibly,<br />

the best strategy<br />

to not only improve<br />

the world but also<br />

attract investors.<br />

The concept is that your investment<br />

should be both socially<br />

beneficial and have<br />

a positive environmental<br />

impact while also making a<br />

financial return. The concept<br />

fits nicely with the overarching<br />

goals of the investment<br />

migration industry, and for<br />

countries willing to embrace<br />

the transformational change<br />

of moving to a sustainable<br />

circular economy, it offers<br />

the opportunity to capture<br />

the attention of like-minded<br />

investors. The growing relevance<br />

of sustainability is<br />

only going to increase in importance<br />

in the years ahead<br />

and could well play a more<br />

significant role in people’s<br />

choice for a residence or a<br />

citizenship programme.<br />

47


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

The Demand for Absolute<br />

Transparency<br />

The calls for absolute transparency are louder<br />

than ever. Media and international watchdogs demand that<br />

programme agencies are fully transparent on how they run their<br />

programmes and publish the details of approved applicants as well<br />

as the number of refusals and the reasons for denial. Transparency<br />

is now the name of the game that programmes will have to<br />

grapple with over the next few years. The industry will need<br />

to cooperate closer with international organisations and law<br />

enforcement agencies to ensure that the industry remains free<br />

from criminality. Transparency has become the most pressing issue<br />

for everyone with a vested interest in protecting the integrity of<br />

the programmes. In the spirit of “sharing is caring”, programme<br />

agencies should also consider a greater exchange of information<br />

on applicants and inform each other of rejected applicants.<br />

These measures would send a strong signal that countries<br />

operating visa and citizenship programmes are taking the<br />

security concerns of their international partners seriously. Being<br />

rejected by one programme and turning up as a newly minted<br />

citizen of another programme does nobody any favours.<br />

The Genuine Link<br />

The genuine link is a topic that provokes much<br />

conversation and philosophical debate when it<br />

comes to the issue of investment migration and<br />

acquiring citizenship in particular. Critics of the<br />

industry are increasingly probing and challenging what genuine<br />

link or connection investment migration applicants have with the<br />

countries of which they are seeking citizenship. Supporters of<br />

citizenship programmes counter with the argument<br />

that citizenship of a country in and of itself is the<br />

ultimate expression and link between the individual<br />

and the state. While our more learned<br />

friends may to-and-fro on the argument,<br />

global policy-makers and the public at large are<br />

less concerned about the philosophical argument<br />

and are more grounded in what they perceive<br />

as a real genuine link with their country. The<br />

investment and acquisition of citizenship has to<br />

be seen as just the beginning of the journey and<br />

not the end of a process for all. Attracting the best<br />

and the brightest is an expensive endeavour for all<br />

involved and comes with a considerable investment<br />

in time and recourses. Countries need to think<br />

more creatively how they are going to harness the<br />

power and influence of these individuals beyond the<br />

relatively short-term investment gain. Like all relationships,<br />

you only get out of it what you put in, and cultivating that<br />

relationship requires countries and programmes to maintain a<br />

physical connection with what could be roving global ambassadors<br />

for their adopted country. Countries need to conceive new ways to<br />

maintain the connection and employ the skills and networks of this<br />

elite group of people for the further development of their country.<br />

Investing in national networking gatherings with your new citizens<br />

might just pay off more handsomely than the initial investment.<br />

A Growing<br />

List of<br />

Services<br />

There is a significant<br />

opportunity for<br />

countries to expand<br />

their service offerings<br />

to investment<br />

migration applicants.<br />

These countries are in a<br />

very privileged situation,<br />

attracting large numbers<br />

of the world’s wealth creators<br />

who, like all time-poor<br />

executives and captains of<br />

industry, often have a need<br />

for professional and personal<br />

lifestyle services. The<br />

development of specialist<br />

products supporting both<br />

the commercial and personal<br />

lives of these individuals,<br />

in areas such as wealth<br />

management, legal, financial,<br />

consulting, advisory,<br />

insurance and healthcare,<br />

could have a longer-term<br />

economic impact on<br />

countries than investment<br />

migration programmes<br />

in and of themselves.<br />

48


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

Data is<br />

King<br />

You can’t do things<br />

better if you are<br />

not measuring them.<br />

The crux for the investment<br />

migration industry is the lack<br />

of trusted data to aid and<br />

guide decision-making. To<br />

expand the research capabilities<br />

of the industry, advisory<br />

firms, regulators and policymakers<br />

need to champion a<br />

partnership model for funding<br />

and producing research on<br />

the investment migration<br />

industry. Creating an investment<br />

migration innovation<br />

fund to attract scientists,<br />

researchers, academics and<br />

industry professionals interested<br />

in conducting studies<br />

would be a major step in<br />

the right direction. Industry<br />

stakeholders currently suffer<br />

from poor visibility due to insufficient<br />

data insight, ineffective<br />

data sharing and<br />

poor cross-industry collaboration.<br />

However, there<br />

is a recognition, particularly<br />

among industry leaders, that<br />

data access and information<br />

sharing is important to guide<br />

policy-making and improve<br />

decision-making so that the<br />

sector can deal with upcoming<br />

issues in a more constructive<br />

manner. Though many point<br />

out that the industry being<br />

“slow to change” was one the<br />

biggest roadblocks to improving<br />

collaboration in the first<br />

place. To provide the level<br />

of trust and gravitas that<br />

would be required to get the<br />

buy-in from the industry, a<br />

Big 4 consulting firm with<br />

a footprint in all relevant<br />

markets and programme jurisdictions<br />

could be the central<br />

point for data collection,<br />

the analysis of that information<br />

and the dissemination<br />

of the findings. This would<br />

allow the industry to take<br />

decisions based on trusted<br />

data and aid in the establishment<br />

of key performance<br />

indicators for the industry.<br />

Taking<br />

the Search<br />

out of Research<br />

Artificial Intelligence (AI) and Machine<br />

Learning (ML) are game-changers in due<br />

diligence. The advances in machine learning techniques<br />

now provide the ability for AI to manage large volumes of data<br />

and detect fraudulent behaviour automatically. AI-enabled<br />

solutions support modern KYC practices, resulting in better<br />

risk analysis and assessment of potential new applicants. In<br />

a manual process, high volumes of data, false positives and<br />

duplicate documents create an enormous strain on time and<br />

budget. For programmes and agents, artificial intelligence<br />

saves time in pre-screening and allows for smart, risk-based<br />

monitoring of applicants. It accelerates the research process<br />

and classifies risk, allowing the researcher to delve into the<br />

analysis of the findings. Recent research found that in the nottoo-distant<br />

future clients will expect their first interaction with<br />

a professional services company to be via a device, turning the<br />

current ‘people first’ and ‘technology second’ strategy on its<br />

head. AI chatbots are already the first interaction many clients<br />

will have with companies and this trend is already appearing in<br />

the business models of the most recent entrants to the sector.<br />

A Top-Priority<br />

Investment<br />

The number of<br />

cyberattacks has grown<br />

steadily during the last<br />

few years. Adobe, Sony,<br />

Target, HSBC and Marriott Hotels<br />

are just some of the household<br />

names that suffered<br />

high-profile hacks where the<br />

attackers walked away with<br />

sensitive personal and financial<br />

information. John Chambers,<br />

the former CEO of Cisco, summarised<br />

it this way: “There are<br />

two types of companies: those<br />

who have been hacked, and<br />

those who don’t yet know they<br />

have been hacked.” Investment<br />

migration programmes hold a<br />

lot of sensitive information on<br />

individuals. While programmes<br />

might wish to guarantee a high<br />

level of privacy when it comes<br />

to sharing the names of individuals<br />

who obtain citizenship<br />

and visa programme approval,<br />

applicants, their advisers and<br />

governments need to be aware<br />

that this is a very difficult task<br />

given the very real possibility<br />

of data theft and hacking scandals.<br />

In order to mitigate this<br />

risk, cybersecurity and encryption<br />

need to be among the top<br />

priorities of all investment<br />

migration programmes.<br />

Mixing up the Marketing<br />

Word-of-mouth and customer referral reign supreme and are still some<br />

of the biggest influences on buyers. The investment migration industry has, to a<br />

large extent, remained loyal to what has been tried and tested over the years: networking events,<br />

conferences, exhibitions and the sponsorship of sporting and cultural events, along with some<br />

appearances in influential traditional media titles. The model has proven its worth in developing<br />

relationships with advisory firms that refer clients. Commission agents, especially in China and<br />

India, have completed the marketing mix. With competition heating up, increasing numbers<br />

of programmes and a near explosion of advisory firms and agents plying for new business, a<br />

competitive intensity is creeping into the marketing of the industry. While positive in that it is<br />

creating wider awareness, some of the marketing practices can be reputationally harmful and, at<br />

best, misleading. This is something the industry needs to rein in before it becomes an issue. As the<br />

industry is seeking to attract new client groups and appeal to a younger audience – the catchword<br />

here is millennials – a broader marketing mix will come into play, including affiliate platforms<br />

and influencer marketing. Programmes, concessionaires, referral agents and their new marketing<br />

partners will need to pay particular attention to the advertising and promotion campaigns that<br />

they are running in countries across the world so that they don’t fall afoul of the local regulations<br />

that are being increasingly enacted and enforced by consumer protection authorities.<br />

49


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Everyone Needs<br />

an Affiliate<br />

Affiliates will be a relatively new marketing term to the<br />

investment migration industry but one that it will<br />

increasingly embrace over the next five years as<br />

the sector becomes more digital in its marketing<br />

to the mass affluent, wealthy millennials and<br />

high-net-worth digital natives. Affiliates operate in<br />

the world of performance marketing, where they only get paid<br />

if and when a lead or sale is delivered to the company. For this,<br />

they typically earn a high referral fee and/or a revenue share<br />

on the fees charged to the client. This segment of the marketing<br />

world is booming and can account for more than 50% of revenue<br />

generated in some industries. The concept of embracing affiliate<br />

marketing has been slow to penetrate the investment migration<br />

industry, but as advisory firms and agents expand operations into new<br />

territories and markets the ability of master marketers such as affiliates<br />

with local on-the-ground knowledge and the ability to deploy rapid native<br />

content marketing campaigns will be hard to match. While all that glitters<br />

is not gold, affiliate marketing comes with its own challenges and pitfalls.<br />

Any firm aiming to embark on this journey will need to have a firm grip<br />

on advertising compliance requirements in all markets they target.<br />

The Compliant<br />

Marketer<br />

Marketing compliance,<br />

advertising rules and data<br />

protection are taking on<br />

a greater significance<br />

for all firms today.<br />

The global nature of the investment<br />

migration industry makes it particularly<br />

prone to potentially violating rules and<br />

regulations without even being aware of<br />

it. Regulators and consumer protection<br />

authorities are increasingly holding<br />

companies responsible for the actions<br />

of anyone who is referring business to<br />

them. The fines in countries like the<br />

UK are not to be sniffed at, as recent<br />

fines have run into many millions of<br />

pounds. Marketing and advertising<br />

are set to become hot topics, as the<br />

industry more readily adopts mainstream<br />

marketing channels such as TV, print,<br />

billboards, online display adverting,<br />

social media, content marketing,<br />

influencer marketing, performance<br />

and affiliate marketing channels. The<br />

marketing and advertising regulatory<br />

landscape is still in flux and changes<br />

frequently. As the industry increasingly<br />

moves out of its comfort zone, this is<br />

an area that management will need<br />

to pay particular attention to.<br />

AML & GDPR<br />

Anti-Money Laundering (AML)<br />

and General Data Protection<br />

Regulation (GDPR) are two unlikely<br />

bedfellows that have been making<br />

their way into the boardrooms and<br />

onto the agenda of the industry’s<br />

executive decision-makers.<br />

Given the severe consequences of failing to<br />

comply with AML obligations, coupled with the<br />

vast fines (up to €<strong>20</strong> million or 4% of a company’s<br />

total worldwide turnover) that could follow any<br />

failure to comply with GDPR rules, it’s no wonder<br />

executives beyond the compliance departments<br />

are grappling with how to meet what, at first<br />

glance, would appear to be contradictory in<br />

nature. AML laws place an obligation on entities<br />

to carry out due diligence, and in doing so<br />

collect and process personal data. In contrast,<br />

the EU’s GDPR seeks to limit the personal data<br />

collected and processed. Countering money<br />

laundering was initially seen as far more<br />

important than protecting an individual’s privacy<br />

even if this meant trumping data protection<br />

rules. The new thinking by regulators is more<br />

cooperative and now obliges advisory firms<br />

to consider AML and GDPR requirements as<br />

complementary to each other and not mutually<br />

exclusive. Companies will now be required to<br />

take a more risk-based approach and prove<br />

that their policies and procedures for data<br />

collection and retention are appropriate to<br />

any potential risk posed by the customer.<br />

50


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

"As seen in other industries,<br />

commoditisation of the<br />

investment migration market<br />

is bringing prices down both<br />

for the services providers and<br />

the country programmes.<br />

Therefore, we can expect<br />

some firms to consolidate<br />

over the next one to five<br />

years, while others will<br />

expand their service offering<br />

to offer more products and<br />

services to the same client.”<br />

Eric Major<br />

CEO of Latitude<br />

Consultancy Limited<br />

Grow Big or<br />

Go Home<br />

While many are feeling that<br />

the industry is ripe for consolidation,<br />

M&A activity hasn’t<br />

gained any real momentum. While<br />

there is an appetite by the top tier firms to<br />

play a role in consolidating the fragmented<br />

industry, there seems to be less of a desire<br />

by the smaller mid-tier firms to be acquired.<br />

However, many believe it is only a matter of<br />

time until deal-making will pick up due to<br />

rising compliance and operational costs that<br />

might drive smaller firms, staffed by just a<br />

few people, to the wall. Firms either need to<br />

scale up significantly to ensure proper compliance<br />

or join forces to achieve economies<br />

of scale to compensate for rising operational<br />

costs. Another factor that is expected to play<br />

a role in driving consolidation is the desire by<br />

larger players to continuously enter emerging<br />

markets, coupled with rising customer expectations<br />

that firms handling their visa or citizenship<br />

applications have a presence in their<br />

home and in their chosen country to ensure<br />

a smooth process and positive customer experience.<br />

An increasingly global footprint, or<br />

at least a strong presence in selected source<br />

and programme markets, will become increasingly<br />

important for service providers to<br />

survive and thrive under the new conditions.<br />

Doing Good is<br />

Good Business<br />

The positive impact of the<br />

investment migration industry is very<br />

rarely reported, with the result that<br />

the industry has an image problem.<br />

While the industry has been responsible<br />

for underpinning struggling economies in<br />

a time of need or has been the catalyst for<br />

job creation, building roads and hospitals as<br />

well as providing infrastructure to support<br />

countries and their citizens to develop and<br />

thrive, much of this remains unseen by<br />

those who oppose the concept of investment<br />

migration. This image issue will not disappear<br />

until the industry embarks on a comprehensive<br />

outreach campaign and genuinely engages the<br />

sincere concerns that the media, governments<br />

and international institutions have with the<br />

investment migration industry. To be seen<br />

as good, one actually needs to do good. The<br />

industry needs to consider some bold moves<br />

beyond facilitating investment flows and show<br />

how the industry and its customers can positively<br />

impact society and the environment globally.<br />

This could be in the form of an industrywide<br />

philanthropic initiative, a redistribution<br />

tax on the industry or organising a global<br />

gathering of investment migration applicants<br />

where investors, countries and NGOs who<br />

require funding could be matched with investors.<br />

Remember: people prefer to do business with<br />

an industry that has a higher purpose.<br />

Taxing Times<br />

Tax is an issue that is not exclusive to the investment migration<br />

industry; however, it has never been as high-profile a topic as it is<br />

today as a result of the global push towards more tax transparency, the<br />

call for the reduction of preferential measures and the introduction<br />

of information sharing and common reporting standards.<br />

Although investor visas and citizenship are not the deciding factor when it comes to determining<br />

a person’s tax status, in some quarters the investment migration industry has been singled out as a<br />

potential avenue for tax avoidance, fraud and other nefarious activities. While it is not beyond the<br />

realm of possibilities that some clever scheme or structure could be used to avoid tax, professionals<br />

point out that there are far easier routes than investment migration. Nevertheless, the industry will<br />

need to prove that it is complying with all international rules that have become the new standard.<br />

On top of that, it needs to take into consideration the expectations of the media and the general<br />

public that the wealthy are paying their “fair share”. Investment migration professionals will need<br />

to become a lot more tax-savvy to advise and inform their clients of any possible tax implications.<br />

Given the fact that it is predominantly wealthy individuals who are using investment migration<br />

programmes, in the minds of many it will be a case of ‘guilty until proven innocent’. Something the<br />

industry needs to watch out for is the possible inclusion of property as reportable capital under the<br />

Common Reporting Standard. Many experts believe that it won’t be long before this asset class will<br />

also become subject to the rules. The EU, the OECD and the <strong>IM</strong>F are all paying close attention to the<br />

industry’s response to this new tax reality, reinforcing the need for the industry to urgently establish a<br />

global standard-setting body that can work with fellow governments and international organisations<br />

to create a framework that would prevent the industry being used for tax evasion purposes.<br />

51


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Finding and Retaining the Right Talent<br />

Given the exponential growth of the investment<br />

migration industry, talent development should be<br />

high on the priority list of government agencies<br />

and programme managers. Professionals have such a<br />

variety of options to choose from, which means companies need to<br />

be clear and transparent of what they offer as an employer. Salaries<br />

and benefits are not the top drivers of employee loyalty; the real<br />

winners of the global “war for talent” are those employers who can<br />

offer an environment created for personal growth and development.<br />

While the focus should be less on hiring large volumes of<br />

candidates, the goal should be to attract and retain top-tier talent<br />

from global institutions, regulatory bodies and corporations,<br />

whose profiles and track records will add instant credibility.<br />

Crypto<br />

Payments<br />

Cryptocurrencies<br />

are slowly but surely<br />

continuing their journey<br />

towards mainstream<br />

acceptance. Even regulators<br />

and financial institutions that<br />

once viewed them a taboo subject<br />

are awakening to the opportunity<br />

cryptocurrencies can offer them<br />

and their industry. The investment<br />

migration industry is one that could<br />

benefit considerably from this new<br />

embrace. While most programmes<br />

do not allow applicants to pay for<br />

investments or contributions with<br />

cryptocurrencies, a select few are<br />

breaking new ground and have<br />

either added them to the payment<br />

mix or are considering doing<br />

so. Dubai, Sweden and<br />

Turkey are three countries<br />

that are close to having a<br />

central bank-issued digital<br />

currency (CBDC) or digital<br />

fiat money. More and more<br />

countries are bringing<br />

in regulations for virtual<br />

currencies and tokens, and<br />

it is quite conceivable this<br />

may be the payment method<br />

of choice for investment<br />

migration in the not too<br />

distant future. With the<br />

number of cryptocurrency<br />

millionaires and billionaires on<br />

the rise, this payment method<br />

could attract a very viable group of<br />

individuals that countries may wish<br />

to attract to their programmes.<br />

Due Diligence – an<br />

Evolving Discipline<br />

The investment migration industry does<br />

a greater level of in-depth background<br />

checks than other industries, including<br />

having people on-the-ground confirming<br />

that the provided information is correct.<br />

Though the banking sector is often being held up as the<br />

standard that the industry needs to attain, the reality<br />

is that in many cases the investment migration sector is<br />

much further ahead. While the vast majority of people<br />

choosing the investment migration route are law-abiding<br />

and respected individuals, no programme is completely<br />

foolproof or watertight. Neither can it predict the future<br />

behaviour of its new citizens. Due diligence service providers<br />

are increasingly employing ongoing monitoring solutions<br />

after the initial due diligence check has been carried out<br />

to ensure no black spot remains undiscovered. Periodic<br />

look-backs by both programmes and professional service<br />

providers at a person’s behaviour even after his or her<br />

visa or citizenship has been approved<br />

would also ensure that<br />

those individuals are not abusing<br />

their new rights and that a<br />

programme’s integrity is maintained.<br />

In order to ensure future<br />

success, programmes will need<br />

to continuously keep pushing<br />

the boundaries and remain at<br />

the forefront of due diligence<br />

innovation to give comfort to<br />

both the industry’s partners<br />

and its external stakeholders.<br />

A Sheriff<br />

for the<br />

Industry<br />

The regulation of agents<br />

and service providers, along<br />

with consumer protection,<br />

will surely be a topic that<br />

will feature high on the<br />

agenda in the coming year<br />

in the wake of a series of<br />

scandals ranging from<br />

the misappropriation of<br />

client funds to investments<br />

in property projects that<br />

never materialised. In<br />

some countries, Canada<br />

being an example, service<br />

providers are regulated,<br />

while many other countries<br />

require agents to register.<br />

However, a pan-industry<br />

regulatory body does<br />

not exist, and countryspecific<br />

regulators often<br />

lack enforcement power.<br />

Regulations for agents,<br />

whether in the form of self<br />

or government regulations,<br />

would go a long way towards<br />

achieving higher consumer<br />

protection standards, which<br />

are becoming ever more<br />

important as the industry<br />

starts servicing clients of<br />

more modest means who<br />

often spend a significant<br />

share of their savings on a<br />

residence and citizenship<br />

programme. Investment<br />

migration, like many<br />

other industries, needs a<br />

regulator with teeth and<br />

a willingness to bite.<br />

52


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

Banking & Payments<br />

The tightening of US banking regulations has seen international<br />

correspondent banks recoil from a host of countries and sectors as they<br />

de-risk their operations to avoid any costly regulatory issues or accusations<br />

over fraud and money laundering. The US-imposed regulations have rippled<br />

through the entire global banking network. While banks may all have their own customer risk<br />

profiles, they are now obliged to apply the risk profiles of their international banking network<br />

partners. The more stringent rules have unfortunately impaired many countries’ banking<br />

systems and rendered some countries virtually bankless and in search of new alternatives.<br />

Enhanced substance requirements and an aversion to processing anything that might attract<br />

a hint of controversy are the main concerns of the banking industry, and according to many,<br />

these are already having an impact on countries operating investment migration programmes.<br />

Banks cite uncertainties about regulatory compliance and KYC procedures as among the main<br />

reasons for cutting back their correspondent relationships, with the result being that entire<br />

economies and regions are excluded from the global financial marketplace. However, on the<br />

positive side, digital disruption is accelerating. Cryptocurrencies, despite being controversial,<br />

and the arrival of central bank-issued digital currency (CBDC) or digital fiat money are opening<br />

up new avenues for the industry to process transactions. Payment providers are increasingly<br />

developing their own connections that enable them to bypass the traditional correspondentbanking<br />

infrastructure. These developments promise to cut costs and speed up processing times<br />

for transactions. They also present an opportunity for investment migration host countries and<br />

entire regions to forge new partnerships and create alternative avenues for cross-border payments.<br />

Next Stop:<br />

Nation As a Service<br />

The investment migration industry, with<br />

the opening up of residence and citizenship<br />

by investment, was most probably the first<br />

real step in the manifestation and realisation<br />

of the concept of nation as a service.<br />

Estonia’s e-Residency programme, although coming from a slightly<br />

different angle, is very much in tune with this idea. The true global<br />

citizen has become a reality with the emergence of digital nomads,<br />

industrial tycoons, high-net-worth individuals, globetrotting professionals<br />

and consultants, as well as bitcoin billionaires who are<br />

reshaping and redefining the citizenship concept. New ideas like<br />

nation as a service and fractional citizenship, where users adopt<br />

a pay-as-you-go subscription model for access to state services,<br />

are gaining ground as countries try to attract the skills and taxes<br />

of the globally mobile. This has opened up a new opportunity for<br />

the investment migration industry to start providing value-added<br />

services and solutions to support those global citizens in their international<br />

work commitments and lifestyles. Greater substance<br />

demands on applicants also mean countries need to start upgrading<br />

their offering by providing more services in areas such as wealth<br />

management, legal, financial, consulting, advisory insurance and<br />

healthcare, to develop a more robust genuine link even if these<br />

services, like the Estonian model, are virtual. The model is slowly<br />

being proven and is certainly one to watch; we could be seeing<br />

some exciting developments on the horizon as more countries start<br />

to bring their concepts to this working idea. While the Estonians<br />

have brought the virtual element to the table, and the investment<br />

migration industry has brought the physical element, the<br />

question is who will be the first to marry these two elements and<br />

deliver a great jump forward in the investment migration model.<br />

53


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Yakof Agius, Founder and CEO of CiviQuo<br />

The Power of<br />

Transparency<br />

CiviQuo is one of the investment migration<br />

industry’s most recent start-ups. It aims<br />

to radically change the way the industry<br />

promotes itself by bringing in elements of<br />

performance marketing and building up an<br />

affiliate network. The wider goal though, is<br />

to bring a whole new level of transparency<br />

to the investment migration industry, says<br />

Yakof Agius, CEO and Founder of CiviQuo.<br />

54


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

Can you briefly introduce CiviQuo?<br />

CiviQuo is the world’s first residency and citizenship<br />

by investment e-marketplace. The platform<br />

brings together a large selection of programmes,<br />

licensed agents, and intermediaries from around<br />

the world, enabling each to showcase their offering<br />

in a very simple, transparent, and straightforward<br />

manner. Individuals interested in RCBI programmes<br />

do not need to browse through many<br />

different sites to find relevant information, but<br />

can use CiviQuo as a resource to find information<br />

on programmes and service providers. A key<br />

feature of CiviQuo is that service providers who<br />

feature on the website need to disclose the professional<br />

fees they will be charging. Clients can<br />

also rate the service provider they’ve used. The<br />

idea behind all this is to introduce a new transparent<br />

formula that will ease the process for our<br />

clients, and transform the way agents, and the industry<br />

at large, market themselves.<br />

How did CiviQuo come to be and<br />

who’s behind the project?<br />

I have spent almost five years working in the investment<br />

migration industry, and at one point, I<br />

got the idea to create something similar to what<br />

booking.com is for the hotel industry, for the<br />

investment migration industry. The investment<br />

migration industry has traditionally followed a<br />

very conservative marketing approach, with professional<br />

advisers, intermediaries, and introducers<br />

playing a key role in acquiring new clients.<br />

Thus far, performance marketing has not really<br />

been utilised in this industry, but I believe it is the<br />

future. I pitched the idea to my long-time business<br />

partner and co-founder, Ryan Darmanin, and together<br />

we developed the concept. Just as booking.<br />

com has changed the way we pick hotels, flights,<br />

and holidays to destinations worldwide, CiviQuo<br />

now aims to help clients source information and<br />

connect them with different service providers.<br />

How exactly do you connect service providers<br />

and clients, and how do you approach<br />

the area of KYC and due diligence?<br />

Once a client has selected a programme from<br />

the website, he or she will be able to view the different<br />

service providers and their prices. In the<br />

next stage, the applicant can then select a service<br />

provider. This stage is key, because clients are<br />

expected to input basic details which will allow<br />

service providers to undertake a good level of due<br />

diligence. We are aware that every agent will have<br />

its own customer acceptance policy, while the<br />

level of due diligence that is undertaken could<br />

“The platform<br />

brings together<br />

a large selection<br />

of programmes,<br />

licensed<br />

agents, and<br />

intermediaries<br />

from around the<br />

world, enabling<br />

each to showcase<br />

their offering in<br />

a very simple,<br />

transparent, and<br />

straightforward<br />

manner.”<br />

also vary by jurisdiction. We have developed a<br />

standardised model for service providers to work<br />

with, and have also gone the extra mile by providing<br />

them the tools to be able to effectively undertake<br />

due diligence. Exiger’s DDIQ is a built-in<br />

feature of the website, and service providers can<br />

either use their own subscription to access it, or<br />

use it on a pay-per-use basis. Agents that usually<br />

use another company’s tools can also do so, but<br />

they need to confirm that they are assuming the<br />

responsibility for it. Once the applicant has submitted<br />

all the information, the service provider<br />

receives the details and can choose whether to<br />

accept the client or not. Basically, we are bringing<br />

the client straight through the service provider’s<br />

front door.<br />

What pricing structure and revenue<br />

model have you adopted and who has<br />

signed up to your platform so far?<br />

We work with two types of plans. The first<br />

package is a free listing; however, service providers<br />

can only be listed for two programmes,<br />

and that’s also where our highest commission is<br />

being applied. The other option is a subscriptionbased<br />

model. This means that our clients pay a<br />

monthly fee, but the revenue share will be lower.<br />

I’ll give you an example. For the Malta Individual<br />

Investor Programme, the highest commission is<br />

35%, which can go down to as much as 17.5% for<br />

a subscription-based plan. Some of the biggest<br />

international names have already joined the platform.<br />

We only launched it a few months ago, and<br />

so far, we have a portfolio of <strong>20</strong> programmes and<br />

26 agents, not to mention that a number of companies<br />

are currently finalising their documentation<br />

and will join us shortly.<br />

Average Service Provider Fees according to CiviQuo<br />

PROGRAMME<br />

AVERAGE<br />

Antigua and Barbuda Citizenship USD 12,300.00<br />

Cyprus Citizenship EUR 37,500.00<br />

Dominica Citizenship USD 13,999.67<br />

Malta Citizenship EUR 44,166.67<br />

Malta Residence EUR 14,999.86<br />

Saint Lucia Citizenship USD 16,500.00<br />

Saints Kitts and Nevis Citizenship USD 12,333.33<br />

United Kingdom Tier 1 Investor Visa GBP 31,500.00<br />

United States EB-5 USD 22,500.00<br />

55


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

High-net-worth individuals are very<br />

private people. Do you believe they<br />

would be willing to rate their service<br />

provider on an internet platform?<br />

I am sure there are some who don’t have a<br />

problem with that but yes, you are right, others<br />

might not want to share that information. That’s<br />

also why we decided to include the option of<br />

reviewing anonymously. In fact, anonymity is<br />

preserved even on some of the most established<br />

and successful platforms, like eBay. While some<br />

say customer reviews lack credibility if they are<br />

anonymous, we can guarantee that the accounts<br />

are real. On CiviQuo, it works like this: an agent<br />

sends a request to a client, asking to rate its services;<br />

a client receives that request and makes a decision<br />

on whether he or she wants to contribute. If<br />

the answer is yes, he or she leaves a detailed feedback<br />

on the company’s CiviQuo page.<br />

In what ways is this platform beneficial to<br />

the wider investment migration industry?<br />

Unfortunately, the industry has been heavily<br />

criticised by the media, and getting increased<br />

attention by government bodies. When you<br />

look at how the industry is promoting and<br />

marketing itself, this is not surprising. What<br />

the industry needs right now is transparency.<br />

Service providers know this, and many of them<br />

talk about the need to be more transparent.<br />

Our platform, specifically due to its two key<br />

features - price disclosure as well as the review<br />

and rating system - adds a level of transparency<br />

to the industry. It is intended to build trust and<br />

create an industry that is open about its products<br />

and prices.<br />

What type of client do you expect to use<br />

your system and what role does digital<br />

marketing play in winning clients today?<br />

If you look at the traffic so far, the age ranges from<br />

25 to 40 years. Looking to the future, in a couple<br />

of years, the majority of investor migrants will<br />

be millennials. Millennials’ behaviour differs<br />

significantly when compared to the previous<br />

generations. People born in the 1980s and 1990s<br />

are assertive and sceptical; they prefer to be selfdirected<br />

in their investments and tend to turn<br />

to online research before making a decision.<br />

CiviQuo has all the right ingredients to win this<br />

age group. The platform will present them with<br />

a trusted source of information, with a diverse<br />

range of products and pricing transparency. This,<br />

we feel, is much needed to convince the-hardestto-reach<br />

generation.<br />

Yakof Agius<br />

is the<br />

founder and<br />

CEO of CiviQuo. He is<br />

the former Chief Risk<br />

and Compliance Officer<br />

of the Malta Individual<br />

Investor Programme,<br />

and has also previously<br />

served as resource and<br />

IT specialist at HSBC<br />

Malta, and Head of HR<br />

at Henley & Partners.<br />

If we look at your website, we see that the<br />

fees of service providers can differ quite<br />

significantly. What do you believe is the<br />

reason for that, and is there a sensitivity<br />

to price in this particular segment?<br />

Our research shows there is. Even though you are<br />

a high-net-worth individual, you are not willing to<br />

splash your money around without any purpose.<br />

In terms of the different prices, based on the<br />

feedback we receive from service providers, my<br />

assumption would be that intermediaries would<br />

have to have a B2B relationship with a licensed<br />

agent to be able to submit the application. An intermediary<br />

has to plan for these higher overhead<br />

costs. We also find that intermediaries might offer<br />

services that a licensed agent is not offering. For<br />

example, in Cyprus, most licensed agents are real<br />

estate developers, so they can provide the vehicle<br />

for the investment. However, an intermediary<br />

based in China, for example, might be able to<br />

provide the financing aspect that the real estate<br />

developer cannot offer. These two entities are offering<br />

the same solution, but with completely different<br />

perspectives. As a benchmark for the fees<br />

that are disclosed on our website we use the professional<br />

fees for a single applicant. We are also<br />

showing whether service providers are licensed<br />

agents or intermediaries, and what services they<br />

are offering. We only list service providers who<br />

can prove to us that they can really go the last mile<br />

and submit an application, either on their own or<br />

in partnership with another professional firm.<br />

Do you expect performance marketing to<br />

become a key driver for the investment<br />

migration industry in the coming years, and<br />

what are Civiquo’s plans for the future?<br />

The investment migration industry has long<br />

recognised word-of mouth as a powerful marketing<br />

tool. Yet service providers are limited in<br />

the number of potential clients they can market<br />

when relying on personal recommendations,<br />

networking events, and so forth. Performance<br />

marketing, on the other hand, has the potential<br />

to work a lot better for the industry — it has<br />

higher chances of opening up new markets and<br />

expanding a business into new localities. It will<br />

definitely gain in importance in the years ahead.<br />

We are still very much at the beginning of our<br />

journey, although we think that the industry has<br />

an appetite for change, and is willing to try new<br />

models of client acquisition. Going forward, our<br />

plan is to grow and eventually start working with<br />

other affiliates, although we will certainly be selective<br />

with whom we will work. It is a question of<br />

transparency, openness and integrity. n<br />

56


SECOND CITIZENSHIP?<br />

JOIN THE GLOBAL COMMUNITY<br />

Strong INVESTMENT<br />

OPPORTUNITIES<br />

Trusted, efficient and STREAMLINED<br />

APPLICATION PROCESS<br />

Citizenship can be passed to<br />

FUTURE GENERATIONS


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

“Agents are the Face of the CBI Industry:<br />

We Need to Act<br />

Responsibly”<br />

Giselle Bru, Chief Executive Officer of<br />

PassPro Immigration Services says the<br />

investment migration industry needs to<br />

learn from luxury brands when marketing<br />

their products, and better engage with the<br />

media, policy-makers and the public at large<br />

to help them understand the industry.<br />

How many times has a frontline member<br />

of staff influenced your perception of<br />

an organisation – whether positively<br />

or negatively?<br />

A helpful sales assistant who recommends<br />

the right outfit for an event or a gracious waiter<br />

who guides you through a confusing menu can<br />

really elevate your shopping or dining experience.<br />

On the flip side, a poorly informed customer<br />

service representative or a bank teller who<br />

failed to advise you on extra fees you would incur<br />

can ruin your perception of an organisation.<br />

No matter how well-managed, responsible,<br />

customer-focused or tech-forward a company<br />

may be, what you remember is your interaction<br />

with the person you spoke to face to face.<br />

In the Citizenship by Investment (CBI) industry,<br />

government authorised agents are the frontline.<br />

We are the face of the industry, and what we<br />

do or say shapes market perceptions.<br />

PROMOTING A HIGH VALUE INVESTMENT<br />

Second citizenship is a highly sought-after investment<br />

for individuals across the world who seek<br />

greater freedom and a more secure and stable<br />

future for themselves and their families. The<br />

“In the<br />

Citizenship by<br />

Investment<br />

(CBI) industry,<br />

government<br />

authorised<br />

agents are the<br />

frontline. We<br />

are the face of<br />

the industry, and<br />

what we do or say<br />

shapes market<br />

perceptions. ”<br />

benefits offered by second citizenship are considered<br />

to hold immense value – allowing those who<br />

acquire it to enjoy unhindered travel to some of<br />

the most desirable destinations – both business<br />

hubs and leisure hotspots, along with numerous<br />

other benefits that allow them to enjoy better<br />

global connectivity and the freedom to do business<br />

around the world.<br />

For government authorised agents tasked<br />

with promoting citizenship-by-investment programmes,<br />

it is imperative that the channels used<br />

to educate potential clients about these benefits<br />

defend their inherent value and do not stray into<br />

promotional tactics that commoditise second<br />

citizenship.<br />

TAKING A LEAF OUT OF LUXURY MARKETING<br />

When was the last time you received an SMS<br />

message or a “50% off” email blast from a luxury<br />

brand? The answer is probably never.<br />

If we look at the marketing and promotion<br />

of other high value products, one rarely sees<br />

the usage of pushy or cut-price tactics. Luxury<br />

brands almost never engage in price-led advertising<br />

for the simple reason that the benefits offered<br />

by high-value products are non-quantifiable.<br />

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INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

Instead, luxury brands use other sales, promotional<br />

and marketing tactics that focus on:<br />

• Storytelling – letting people who have<br />

already acquired their products demonstrate<br />

how they have improved their quality of life.<br />

• Educating consumers on the brand history,<br />

handcrafted detail and hours that go<br />

into making a product and the inherent<br />

quality of the raw materials used.<br />

• Cultivating positive brand associations<br />

and developing valuable partnerships with<br />

other highly trusted and respected brands.<br />

• They show rather than tell and often<br />

get other people to talk on their behalf<br />

– peer-to-peer references, reviews and<br />

word-of-mouth is used extensively, rather<br />

than intrusive and repetitive ads.<br />

Their entire strategy is based not on “push” marketing<br />

but on “pull” tactics – making people understand<br />

the value of the product, trust the brand<br />

and see it as a long-term investment in improving<br />

the quality of their life rather than a one-time<br />

purchase.<br />

Maintaining not just a positive brand image<br />

but also the high-value of the citizenship by investment<br />

product is crucial. It directly impacts<br />

the attraction of new investors and the capacity<br />

to maintain good relationships with existing investors,<br />

in addition to the far-reaching effects it<br />

has on resident citizens and the local Caribbean<br />

economies.<br />

THE MEDIUM IS THE MESSAGE<br />

As agents, we need to avoid using marketing<br />

channels such as SMS blasts, deal-based offers,<br />

and ads prominently featuring Caribbean passport<br />

images – these marketing tactics perpetuate<br />

the idea that passports can be purchased easily<br />

for cash, with no other eligibility criteria or due<br />

diligence safeguards.<br />

Instead, we need to focus on tactics that build<br />

trust and highlight the inherent high value of<br />

second citizenship. Direct referrals are among<br />

the strongest channels of new business in this<br />

industry, and referrals are based wholly on trust.<br />

We need to cultivate strong relationships with<br />

our existing clients – who have already experienced<br />

the value of second citizenship – and let<br />

them act as advocates.<br />

We also need to demonstrate the constitutional<br />

strength of the programmes and the depth<br />

of the due diligence process employed.<br />

THE ROLES OF EDUCATORS AND REGULATORS<br />

Irresponsible advertising can play a role in<br />

fuelling negative publicity of citizenship-byinvestment<br />

programmes. As agents, we need<br />

to stand alongside governments and play a key<br />

role in educating clients, the media, banks, government<br />

policy advisors, and border control<br />

agencies about how the industry works. We also<br />

need to help build a more robust regulatory<br />

environment within which we can all operate<br />

more responsibly.<br />

Giselle Bru<br />

oversees<br />

PassPro<br />

Immigration Services,<br />

headquartered in Dubai.<br />

With more than a decade’s<br />

experience, Giselle is a<br />

trusted advisor to highnet-worth<br />

investors and<br />

policy-makers within the<br />

investment migration<br />

community. Giselle<br />

brings together a solid<br />

background in government<br />

service – drawn from time<br />

spent working at the Inter-<br />

American Development<br />

Bank, the Ministry of<br />

Health and the American<br />

Embassy in Belize – with<br />

in-depth knowledge<br />

of the real estate<br />

landscape in markets<br />

as diverse as Panama,<br />

Belize, the Caribbean<br />

islands and Cyprus.<br />

As agents, we should pursue a far-sighted<br />

communications strategy that is built less on<br />

transactional communication and more on<br />

educating the consumer – on the programme<br />

mechanics, the strict and deep due diligence<br />

requirements, and the duties alongside the benefits.<br />

Alongside these efforts must come a strong<br />

push for educating policy-makers, regulators, immigration<br />

departments, and law enforcers to understand<br />

how and why citizenship by investment<br />

programmes operate, how they respect existing<br />

banking, law enforcement and AML/FT regulations,<br />

and how they contribute to the long-term<br />

sustainable development of the countries that<br />

offer them.<br />

TRANSFORMATIONAL CHANGE<br />

Most of the countries currently operating CBI<br />

programmes are small island nations for whom<br />

CBI receipts constitute a significant channel of<br />

foreign direct investment, and a source of debtfree<br />

income. Monies from CBI programmes have<br />

not just financed infrastructure development,<br />

they have supported social security and community<br />

health programmes, and served as an integral<br />

lifeline during devastating natural disasters<br />

such as Hurricane Maria and Hurricane Irma<br />

that wreaked havoc in the Eastern Caribbean a<br />

few years ago. Advocacy efforts must focus on<br />

shining a light on the positive impact of these<br />

programmes on the countries that offer them<br />

and their resident citizens, while also highlighting<br />

how the self-sufficiency of these nations is in<br />

the interest of the global community as a whole.<br />

Cultivating media contacts who can serve as<br />

partners in spreading this message is a crucial<br />

way we as agents can make a difference. When<br />

talking to the media, share a balanced message<br />

that focuses not just on the visa-free travel benefits<br />

afforded to investors but on the long-lasting<br />

benefits of the programmes to the home nations.<br />

Connect media in your home countries with<br />

government spokespeople who can give voice to<br />

a broader story. Try to avoid reducing the story<br />

to statistics – annual numbers of citizenships,<br />

nationalities of investors and the dollar worth of<br />

the industry are empty facts; how have the lives of<br />

these thousands of citizens investors transformed<br />

and how have CBI receipts been utilised for community<br />

good are the real story. Tell it well and tell<br />

it often.<br />

As with all industries, stronger regulation<br />

will go a long way in helping the industry and<br />

its players mature more rapidly. It is therefore<br />

highly encouraging that several CBI units have<br />

recently expressed clearer guidance on advertising<br />

and promotional best practices.<br />

What we say and do as agents has a long-term<br />

impact on the future of the citizenship by investment<br />

industry. It’s time we practice accountability<br />

for our actions and promote the programmes<br />

responsibly. n<br />

59


<strong>IM</strong><br />

INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Gerd Damitz, Past President of the Canadian Association<br />

of Professional Immigration Consultants (CAPIC)<br />

Regulated<br />

Consultants<br />

Keep Fraud<br />

at Bay<br />

While Canada has long been<br />

self-regulating immigration<br />

consultants, the country is<br />

now on its way to giving the<br />

industry watchdog more<br />

power to investigate offenders<br />

and enforce regulation. Gerd<br />

Damitz, Past President of<br />

the Canadian Association of<br />

Professional Immigration<br />

Consultants (CAPIC), talks<br />

about Canada’s experience in<br />

self-regulation and explains<br />

why he believes that Canada<br />

can be a role model for others.<br />

Can you give us a brief overview of the<br />

Canadian Association of Professional<br />

Immigration Consultants (CAPIC)<br />

and the regulation of immigration<br />

consultants in Canada?<br />

CAPIC is Canada’s largest non-profit organisation<br />

of immigration practitioners and has some<br />

2,500 members. All our members are regulated<br />

by the Immigration Consultants of Canada<br />

Regulatory Council (ICCRC), the current industry<br />

self-regulator overseeing immigration<br />

consultants offering paid advice, consultation,<br />

assistance or representation services to individuals<br />

planning to immigrate to Canada. All immigration<br />

and citizenship consultants – there is<br />

a total of 5,000 in Canada – need to be licensed<br />

by the ICCRC.<br />

When did Canada decide to regulate<br />

consultants and how would you describe<br />

Canada’s regulatory journey so far?<br />

Canada started looking at regulating immigration<br />

specialists some <strong>20</strong> years ago, at a<br />

time when there were a couple of fraud cases<br />

and missing standards shaking the industry.<br />

However, the road to self-regulation was long<br />

and winding. Initially, we faced strong opposition<br />

from the law societies which challenged<br />

the idea of non-lawyers representing clients in<br />

immigration matters. The Supreme Court of<br />

Canada eventually ruled in favour of immigration<br />

consultants providing broader legal access<br />

to the public. In <strong>20</strong>04, the first regulator for<br />

the industry was set up, the Canadian Society<br />

of Immigration Consultants (CSIC). However,<br />

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INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

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in the years that followed, CSIC was heavily<br />

criticised by the public and practitioners alike,<br />

due to internal mismanagement, and eventually<br />

CSIC stopped operating. The Immigration<br />

Minister at the time then asked for submissions<br />

from candidates interested in becoming<br />

the regulator of immigration consultants, and<br />

we, as CAPIC, assisted and supported the bid of<br />

the ICCRC, the current regulator. However, the<br />

problem of unauthorised practitioners persists<br />

to the present day.<br />

Is fraud a big issue in the industry?<br />

Not so much in terms of regulated professionals,<br />

though black sheep are everywhere. However, it<br />

is a huge problem on the unregulated side. Thus<br />

far, there is very little we can do. The ICCRC was<br />

established as a not-for-profit corporation and<br />

has no regulatory power to pursue unauthorised<br />

immigration practitioners within Canada.<br />

They can only forward related complaints to<br />

the Canada Border Services Agency (CBSA),<br />

which naturally will concentrate their resources<br />

on very serious cases. Besides, most unauthorised<br />

practitioners are based outside of Canada,<br />

which makes it even more difficult to deal with<br />

fraud cases. We have been lobbying intensively<br />

over the past years to provide the ICCRC with<br />

the statutory power to proceed with complaints<br />

against unauthorized practitioners and obtain<br />

also more enforcement power with respect to<br />

regulated consultants. In our opinion, it is important<br />

that a regulator has international reach<br />

and the power to negotiate agreements with<br />

foreign government departments in order to<br />

address unregulated practitioners operating<br />

outside Canada, but handling Canadian immigration<br />

files. I am happy to add that our efforts<br />

are bearing fruits. In April <strong><strong>20</strong>19</strong>, the Government<br />

of Canada proposed in a federal statute the creation<br />

of a new body, the College of Immigration<br />

and Citizenship Consultants (CICC), to govern<br />

and regulate immigration and citizenship consultants<br />

and ensure their professional conduct.<br />

Under the current plans, the system will retain<br />

self-regulatory elements, but the College would<br />

have the powers and tools required for vigorous<br />

oversight, enforcement, investigations and punishment<br />

to root out fraudulent, unregulated immigration<br />

and citizenship consultants and hold<br />

them accountable for their actions inside and<br />

outside of Canada.<br />

CAPIC has been instrumental in shaping<br />

Canada’s legislation and creating a regulated<br />

environment for the profession. What would<br />

you highlight as the main challenges along<br />

the way to this newest federal statute?<br />

The biggest challenge was to convince the<br />

consultant community in the first place. I do<br />

not exaggerate when saying that initially there<br />

were only a handful of people who believed in<br />

the idea of self-regulation by federal statute.<br />

Gerd Damitz<br />

holds a BA/<br />

MBA in<br />

Corporate Planning &<br />

Human Resources. Besides<br />

his decade-long experience<br />

as an expert in Strategic<br />

Planning and as a General<br />

Manager of a Stock<br />

Exchange Registered Corp,<br />

he has been a professional<br />

Canadian Immigration<br />

Consultant for the last <strong>20</strong><br />

years. He also held various<br />

executive positions in<br />

associations significantly<br />

defining the existing<br />

immigration consultant<br />

industry structures. He is<br />

a Past President of AICC, a<br />

Founding & Past President<br />

of CAPIC, a Founding<br />

Director of the Regulator<br />

ICCRC, and received<br />

for his contribution<br />

several industry awards.<br />

For many years he has<br />

been a leading Industry<br />

Association representative<br />

at meetings with the<br />

Canadian Government and<br />

Members of Parliament.<br />

We spent many hours trying to convince our<br />

colleagues that this would be the tool to overcome<br />

existing deficiencies. The next step was to<br />

convince government and policy-makers, and<br />

we haven’t stopped lobbying to this day. Selfregulation<br />

is a privilege, not a right, which the<br />

Government of Canada can remove, as it has<br />

previously done. We have been talking to all<br />

members of parliament, not just to government,<br />

showcasing that self-regulation is working. We<br />

know that there has been room for improvement,<br />

but the point is that both the industry<br />

and the regulator are learning from mistakes<br />

and improving accordingly. So we lobby on the<br />

micro and the macro level, and also focus our<br />

attention on the media and the general public. A<br />

major point has been about getting journalists<br />

to make a clear distinction between regulated<br />

consultants and unregulated practitioners, and<br />

the message seems to be getting through. In addition,<br />

we are running a number of initiatives<br />

to show the general public the benefits of the<br />

current system and are present in communities<br />

where we offer free immigration clinics.<br />

Do you believe Canada could be an example<br />

for other countries to follow, and do you<br />

have any advice for professionals seeking to<br />

address negative perceptions of the industry?<br />

I think Canada can be an example, even for<br />

countries and organisations in the European<br />

Union. Canada is a federal state and lobbying<br />

here means dealing with many provincial governments<br />

who actually have a lot of power. In a<br />

way, it is pretty similar to the situation in Europe<br />

with its different actors who all follow their<br />

own agenda. We know from experience that it<br />

requires a lot of patience to achieve a common<br />

position that works for all, but the only way to<br />

get there is to convince different parties in different<br />

regions with rational arguments. It is very<br />

important to make it a bi-partisan subject, and<br />

in my opinion the key words are ‘consumer protection’.<br />

Consumer protection is in the interest<br />

of everyone; politicians, policy-makers and the<br />

industry itself, since we all know that one bad<br />

apple spoils the whole barrel.<br />

What’s your outlook for the future?<br />

We still have a lot of work ahead of us. Federal<br />

elections are scheduled for autumn <strong><strong>20</strong>19</strong>, so it<br />

is very important for us to continue lobbying<br />

to all parties. Even though right now it looks<br />

like we will be able to continue with elements<br />

of self-regulation, the potential of a full government<br />

regulation remains. We argue that we are<br />

a young industry, self-regulated only for about<br />

15 years, but the sector is maturing quickly. If<br />

you compare this with the law societies that are<br />

<strong>20</strong>0 plus years old, we have come a long way in a<br />

relatively short period of time. n<br />

61


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

The 5 th Investment Migration Forum<br />

Save the Date<br />

1 st - 4th June <strong>20</strong><strong>20</strong><br />

Save the Date<br />

1 st -4 th June <strong>20</strong><strong>20</strong><br />

62<br />

investmentmigrationforum.org


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

Global Citizen<br />

Tax to Shift<br />

Industry Focus?<br />

Armand Arton has long been<br />

calling for the introduction of<br />

a levy on investment migration<br />

programmes to source funding<br />

for humanitarian assistance<br />

and development projects that<br />

can help address the wider<br />

causes of migration. As the<br />

industry is reaching maturity,<br />

“we have the opportunity to do<br />

things right,” Arton writes.<br />

Global citizenship has helped shape a brighter future for the<br />

1% of the world’s high-net-worth individuals and their families,<br />

fortunate enough to access bigger and better opportunities<br />

across the globe. While the industry’s focus was primarily on<br />

offering second residence or citizenship to the 0.001% of the world’s<br />

migrants who can afford the investment, it has neglected one of the<br />

most pressing opportunities in its realm: extending the same benefits<br />

to those who can’t. The failure to do so not only<br />

hurt the industry’s reputation but it allowed it to<br />

become a target of unwarranted attacks. Migration<br />

has endured for thousands of years, affecting millions<br />

of people from all walks of life, each with the<br />

goal to either survive, or the desire to strive.<br />

Global Citizen Tax<br />

The idea of the Global Citizen Tax was first introduced<br />

in the midst of the refugee crisis back in<br />

<strong>20</strong>15. As global challenges continue to grow, the<br />

Global Citizen Tax initiative becomes even more<br />

relevant and needed. As an industry reaching<br />

maturity, we have the opportunity to do things<br />

right. A united industry represents a stronger<br />

force, and initiatives like the Global Citizen Tax<br />

could help accelerate its growth while advocating<br />

for the other 99%. With the potential to raise<br />

over €1 billion over the next five years, the Global<br />

Citizen Tax would be fuelled through the contribution<br />

of investors who would add between 1%<br />

and 5% to their prescribed investment for second<br />

residence or citizenship in an EU member state.<br />

Current Migration Crisis<br />

Despite the lack of news surrounding the continued<br />

influx of refugees flooding from the<br />

Middle East and North Africa into Europe, migration<br />

remains a dominant trend that continues<br />

to exact a large toll on the families who flee<br />

for a better life, the countries receiving them,<br />

and the international institutions and NGOs<br />

charged with providing basic humanitarian assistance.<br />

According to the UN High Commissioner<br />

Armand<br />

Arton is the<br />

founder and<br />

president of Arton<br />

Capital. His professional<br />

designations include<br />

Chartered Investment<br />

Manager (C<strong>IM</strong>) and<br />

Fellow of the Canadian<br />

Securities Institute<br />

(FCSI). He graduated<br />

with a BA in Finance from<br />

Ecole des Hautes Etudes<br />

Commerciales (HEC)<br />

and an International<br />

Baccalaureate from<br />

College Jean-de-Brébeuf.<br />

for Refugees (UNHCR), “as of 30 June <strong>20</strong>18, there were a total 70.4<br />

million people of concern”. Their figures also reveal that last year<br />

alone, more than 116,647 refugees and migrants risked their lives<br />

crossing the Mediterranean Sea to reach Europe. Meanwhile, the<br />

global refugee population continued its upward trend reaching<br />

<strong>20</strong>.2 million by mid-<strong>20</strong>18. UNHCR estimates that the average time a<br />

refugee from Syria will remain in that status is 17 years – creating a<br />

lost generation of families and children who may<br />

spend their formative years in limbo. In addition,<br />

the number of people who have lost their lives<br />

at sea is devastating – an estimated 14,281 people<br />

since <strong>20</strong>15, half of whom were women and children.<br />

This is nearly the same number of families<br />

who invested in a second residence or citizenship<br />

in the EU during the same period.<br />

Industry Solution<br />

The global citizenship industry should be part<br />

of the solutions by joining hands with partners,<br />

governments and international organisations<br />

to address such challenges. Various European<br />

countries that are accepting refugees are also<br />

in many instances attracting foreign investors<br />

through their Global Residence and Citizenship<br />

Programmes for investors, including Cyprus,<br />

Malta, Portugal, and Spain. In Europe, such programmes<br />

have attracted more than €15 billion in<br />

capital over the past 10 years. It can be broadly assessed<br />

that the volume of these programmes for<br />

the period <strong>20</strong>17-<strong>20</strong>18 has reached over €2.6 billion<br />

globally, growing annually at nearly 25%. Based<br />

on these numbers, the volume of direct economic<br />

benefits from the implementation of such<br />

a Global Citizen Tax on the popular immigrant<br />

investor programmes could reach as much as €1<br />

billion in the next five years.<br />

By shifting our focus on sharing a global responsibility<br />

and ensuring the industry enforces<br />

its mission to empower sustainable migration, we<br />

are advocating to unite the resources of 1% of the<br />

world to help the remaining 99%. n<br />

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<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

What it takes to build AN<br />

Efficient RCBI Programme<br />

For the past four years, I have been reviewing<br />

most of the world’s business migration<br />

schemes. Every year I analysed and<br />

dissected 100 such programmes for our<br />

database and our reports. All that knowledge<br />

enabled us to understand trends in the industry,<br />

mechanisms behind the programmes, and<br />

which nationals are drawn to what programme.<br />

It also allowed us to predict which investment<br />

migration programmes will be successful and<br />

which will struggle to gather momentum. In our<br />

latest Government Report , we wrote about how<br />

governments can use investment migration to<br />

strengthen their economy. The report spans 100<br />

pages, but I will try to summarise it.<br />

What’s your country’s economic need?<br />

Eight of the ten countries with the worst Current<br />

Account Balance in the world have a CBI programme.<br />

This, of course, is not a consequence<br />

of the programmes, but rather the reason why a<br />

CBI came to be. It generally takes a large amount<br />

of political sacrifice to launch a CBI, but it can<br />

be justified when it substitutes drastic austerity<br />

measures. All investment migration programmes<br />

should be built based on specific economic needs<br />

of a country. It is important to assess those needs<br />

and build a programme that makes sense. A high<br />

amount of government debt and high unem-<br />

Stéphane Tajick,<br />

President and<br />

Chief Advisor of<br />

STC, highlights<br />

what governments<br />

should keep in mind<br />

when designing an<br />

investment migration<br />

programme.<br />

ployment are the most common woes that governments<br />

want to tackle. In most cases, efficient<br />

RCBI programmes can help heal the country’s<br />

economy if they are backed by logic and data.<br />

Understandably, CBI programmes have a greater<br />

impact in small countries, given that an additional<br />

revenue of $<strong>20</strong>0m a year affects smaller economies<br />

more than larger ones.<br />

It is also important to consider regional<br />

needs within a country, since disparity can exist.<br />

Certain regions have stronger pull factors than<br />

others, which could affect the goal of any policy.<br />

For example, in Spain the need for real estate<br />

investment was pressing after the <strong>20</strong>08 financial<br />

crisis. The investor programme with a real estate<br />

option was created in <strong>20</strong>13. However, over the<br />

years, the number one investment destination<br />

was Barcelona, the region that needed it the least,<br />

and where people today suffer from housing unaffordability.<br />

This means that assessing regional<br />

needs, and making sure that push and pull<br />

factors are addressed, is immensely important.<br />

Tracking performance<br />

Every serious investment is tracked and assessed<br />

along the way. Investment in an RCBI<br />

programme should be no different, especially<br />

when it’s made to be an economic development<br />

policy. Tracking performance is not only impor-<br />

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INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

tant to assess if the policy is working, but also to<br />

optimise its impact and to make sure it doesn’t<br />

overheat certain markets. For example, an entrepreneur<br />

programme created to address high<br />

unemployment should start lowering its output<br />

once unemployment starts approaching the<br />

desired number. The example of Barcelona and<br />

the Spanish investor programme showed that<br />

untracked performances could also have a negative<br />

impact on the economy, because in this case<br />

the real estate market overheated. It should be<br />

noted that the Barcelona property market didn’t<br />

overheat because of the investor programme;<br />

nevertheless, the investor programme should<br />

prevent investment in overheated property<br />

markets. Therefore, tracking price indices is as<br />

important as implementing quotas, for the policy<br />

to have the desired effect. Meanwhile, whatever<br />

your country is offering in exchange of investment<br />

must be competitive in the global market.<br />

A CBI programme of a country with a poor passport<br />

in terms of visa-free travel will not gather<br />

much revenue. At the same time, it will be hard<br />

for a country to attract innovative start-ups if it is<br />

not ranked high as a place to do business in.<br />

High level of transparency and due diligence<br />

Investment migration has been under a lot of<br />

criticism in the last few years, most of which is unfounded<br />

and unfair. The EU parliament singled<br />

out RCBI schemes as a security risk, although<br />

these apply a higher level of due diligence than<br />

any other residence or citizenship pathway. It’s<br />

becoming a norm to have four-tier due diligence<br />

system applied to any programme. Transparency<br />

about the number of applicants and investment<br />

received should also become a norm. One thing<br />

we advise governments to do is to follow the<br />

Quebec model of adding an extra layer of defense<br />

by having solid intermediaries between the government<br />

agency and the applicants. In the case<br />

of the Quebec Immigrant Investor Program, these<br />

are financial intermediaries that serve the purpose<br />

of filtering applications, holding the investment<br />

funds in escrow and marketing the programme.<br />

Pricing and market research<br />

It’s important for every government to do its<br />

research on competing RCBI products before<br />

launching their own programme. Like any<br />

product, it should be priced based on production<br />

costs and market price. Market price can be<br />

obtained by comparison with similar countries;<br />

after that it really depends on the production<br />

level – are you looking for 100 applicants a year<br />

or 1,000? But production costs are much more<br />

obscure when it comes to a RCBI product. There<br />

are direct costs associated with it, such as processing<br />

the application, marketing the programme,<br />

due diligence on files and so on. Then there are<br />

other costs that are more abstract, such as the<br />

cost of having an extra citizen. An easy estimate is<br />

to take the government budgets at different levels<br />

for the year and divide these by the population.<br />

That’s a high number, but it’s the benchmark I<br />

Stéphane<br />

Tajick is Head<br />

Advisor of<br />

Stephane Tajick Consulting<br />

(STC). STC has become<br />

a leading provider of<br />

data and reports for the<br />

investment migration<br />

industry with detailed data<br />

from 150 world cities and<br />

reports covering over <strong>20</strong>0<br />

immigration programmes<br />

catering to entrepreneurs<br />

and investors. Prior to<br />

setting up STC, Stéphane<br />

was involved in different<br />

sectors ranging from<br />

hospitality to retail.<br />

use for RCBI programmes that are supposed to<br />

have positive economic impacts. Factors such as<br />

whether a country is providing free university<br />

and health care also need to be taken into consideration<br />

when fixing eligible ages for children and<br />

parent dependents.<br />

Someone needs to make money in<br />

order to sell your programme<br />

In order for the investment migration industry<br />

to promote a RCBI programme, it needs to be<br />

profitable for them. It’s not a question of greed;<br />

working on a new programme takes considerable<br />

investment. The industry needs to know it’s<br />

going to be profitable for them to do so. This is<br />

a key aspect that was overlooked for many years,<br />

and makes a significant difference in terms of<br />

the popularity of a programme. Commission is<br />

a possibility, but not the only one. The Quebec<br />

Immigrant Investor Programme, for example,<br />

allowed financial intermediaries to offer financing<br />

to investors, and by providing those services,<br />

they were able to earn significant revenue that<br />

made the programme particularly attractive to<br />

them. They were, in turn, able to commission<br />

immigration consultants that send them clients.<br />

Besides, for large firms scalability plays a role.<br />

Five to ten applicants are not enough to support<br />

the investment they need to enter a new programme,<br />

while the potential to duplicate administrative<br />

and application processes is important.<br />

Entrepreneur and start-up programmes often<br />

lack this, since most of them require a custombuilt<br />

business plan.<br />

Avoiding sudden changes<br />

A few years ago, the UK tier 1 investor programme<br />

was amended, and had its investment<br />

amount increased from £1m to £2m. This sudden<br />

price change led to a collapse in demand during<br />

the following year. It took a few years for the<br />

demand to recover, and this after an important<br />

loss in earnings. At this point, it should be said<br />

that the decision in itself to increase the amount<br />

is not subject to debate. Rather, it’s about how<br />

they went on to implement those changes. 21st<br />

century policy-making is not only about making<br />

the right policies, but also limiting the negative<br />

impact policies could have. In this case, other<br />

than the loss of earnings, there was a negative<br />

impact on the industry professionals that supply<br />

candidates to the programme. Due to significant<br />

drop in demand, their revenue suffered and staff<br />

were laid off; firms that were in a fragile state<br />

most likely collapsed. This is why such changes<br />

must take place over time, and price changes<br />

should be phased in. Significant changes, such<br />

as a price drop, are only recommended if a government<br />

wants to bring its programme back to<br />

life. Even if a government wants to close a programme,<br />

it’s recommended to phase it out, and<br />

government should announce its intentions long<br />

before. Otherwise, this might affect the reputation<br />

of the investment migration industry, and<br />

that of all other interconnected industries. n<br />

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<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Furthering the Investment Migration<br />

Industry’s Sustainability<br />

EU member states with the sovereign right to manage their own national economic<br />

policies are feeling the weight of increased pressure from EU institutions and<br />

international lobby groups to make changes to, or even phase out, their residency and<br />

citizenship by investment programmes. Julia Farrugia Portelli, Malta’s Parliamentary<br />

Secretary for Citizenship, Reforms and the Simplification of Administrative Processes<br />

speaks to the <strong>IM</strong> <strong>Yearbook</strong> about Malta’s stand and perspectives in this regard.<br />

The Maltese programmes for residency<br />

and citizenship-by-investment (RCBI)<br />

have both been categorical achievements.<br />

Over a brief period of time, my country launched<br />

robust propositions that quickly caught the eye<br />

of investors looking to having alternative opportunities<br />

for relocation, mobility, education, and<br />

global business. Our programmes are now well<br />

established in the sector, and we believe they give<br />

competitors a good run for their money.<br />

We ascribe to this success several elements<br />

– a robust framework, strategic marketing in receptive<br />

regions, and a thorough due diligence<br />

process that ensures only the most fit-and-proper<br />

individuals and families are accepted and granted<br />

Maltese residency and citizenship.<br />

Beyond doubt, by far the most attractive<br />

feature is our country itself. With an economy<br />

that keeps punching above its weight, a government<br />

that’s open to entrepreneurship, innovation<br />

and business, and an increasingly cosmopolitan<br />

lifestyle in a safe and stable jurisdiction, choosing<br />

Malta becomes easy.<br />

“Indeed, our<br />

processes are<br />

considered a<br />

benchmark to<br />

be emulated in<br />

the industry, and<br />

we are willing<br />

to share our<br />

best practices<br />

so that we can<br />

work towards<br />

standardisation<br />

in the sector.”<br />

Our Challenges<br />

Sometimes, then, success brings on its own set of<br />

challenges. Notwithstanding the sovereign entitlement<br />

of Member States and countries to offer<br />

second citizenship and residency, notwithstanding<br />

being enablers of mobility, offering global<br />

citizens better family situations and fresh opportunities<br />

to do business, there is a mounting pressure<br />

on phasing out these programmes.<br />

Although we are not on the same page, we acknowledge<br />

and understand the concerns that are<br />

being voiced in various echo chambers. They disregard<br />

the valuable direct contribution to sovereign<br />

wealth and state economies. They overlook<br />

the legitimate global demand brought about by<br />

regional political and economic volatility. They<br />

discount the fact that the percentage of individuals<br />

granted citizenship and residency in the EU<br />

via investment is a minute fraction of those naturalised<br />

by other means, where the due diligence<br />

process is nowhere like that employed by RCBI<br />

programmes.<br />

We acknowledge the apprehension that disreputable<br />

individuals may be able to find their<br />

way into the Union. However, we are confident<br />

these fears can be allayed by a guarantee of thorough<br />

due diligence that leaves no stone unturned<br />

in filtering out these individuals.<br />

We say this with the comfort that Malta<br />

already applies the highest of standards in enhanced<br />

due diligence checks. Indeed, our processes<br />

are considered a benchmark to be emulated<br />

in the industry, and we are willing to share<br />

our best practices so that we can work towards<br />

standardisation in the sector.<br />

Despite this, all investment migration programmes<br />

should aim for attaining the highest<br />

standards to ensure that integrity and reputability<br />

become benchmarks across the industry. For<br />

the sake of transparency, Malta also regularly<br />

publishes the names of new citizens, and takes<br />

all the necessary steps to uphold European regulation<br />

on anti-money laundering, counter terrorism<br />

and tax avoidance.<br />

The Future Ahead<br />

In this context, it is clear that the way forward<br />

for sustainable RCBI programmes is one of strict<br />

self-regulation, applying the highest operational<br />

standards that appease the most demanding of<br />

regulators. n<br />

66


United Kingdom Cyprus Antigua & Barbuda<br />

Grenada<br />

St Kitts & Nevis Malta Dominica Greece Canada<br />

Antigua & Barbuda Turkey Moldova St Lucia<br />

Montenegro<br />

London l Dubai I Istanbul I Kiev I Hong Kong<br />

beyond-immigration.com


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

The World of<br />

Investment Migration:<br />

What’s New?<br />

The investment migration landscape is fast evolving, with a<br />

greater number of countries launching residence, entrepreneur<br />

or citizenship programmes. The <strong>IM</strong> <strong>Yearbook</strong> has reached<br />

out to the industry to see what’s hot and what’s not.<br />

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INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

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Greece<br />

Greece has won the laurels of attracting<br />

record number of applications to its golden<br />

visa programme in <strong>20</strong>18. The country issued<br />

a total of 11,445 visas to investors and their<br />

family members last year, with China being<br />

the top source market accounting for more<br />

than 6,800 visas. Since the introduction of the programme in<br />

<strong>20</strong>13, Greece issued more than 35,000 golden visas. However,<br />

mired in controversy, according to agents the outlook for <strong><strong>20</strong>19</strong><br />

is less rosy. Demand will likely drop, partly as a result of newly<br />

brought in measures that include a ban on paying for property<br />

through credit card terminals, which have allegedly been<br />

used to circumvent Chinese capital restrictions in the past.<br />

Portugal<br />

The shine seems to have come off Portugal. Once<br />

the bellwether for the industry in terms of attracting<br />

applicants, the golden visa programme has taken<br />

somewhat of a dip. The total investment in the<br />

programme dropped 31% in February compared<br />

to the same month in <strong>20</strong>18 according to figures<br />

released by the country’s Foreigners and Border Service (SEF).<br />

The programme may well attract further controversy because<br />

many applicants who entered the programme did so with the<br />

expectation that after a number of years they would be able<br />

to apply for citizenship. Soundings coming off from Portugal’s<br />

government seem to indicate that this may be a remote possibility<br />

for those applicants who have not actually relocated to Portugal.<br />

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<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

The UK<br />

Despite the unknown outcome of Brexit<br />

negotiations, the UK appears to remain an<br />

attractive destination among wealthy migrants,<br />

especially among the Chinese. In <strong>20</strong>18, Chinese<br />

applications for the Tier 1 investor visa have<br />

reportedly increased by 19%, and accounted for 63%<br />

of the 228 applications last year, up from 50% in <strong>20</strong>17. Uncertainty<br />

surrounding the programme’s future was seen as one reason that<br />

prompted applications. In addition to the UK’s Brexit woes, the<br />

government had announced that it would stop the investor visa<br />

programme amid concerns that adequate compliance checks were<br />

not being conducted. While this decision was overturned following<br />

strong opposition, new rules, especially with regard to source of<br />

funds, were introduced to reform the programme. Besides, the UK<br />

programme could see another windfall from Brexit: The investor<br />

visa might become an attractive option for those Europeans who<br />

may wish to live in the UK but will not be able to do so as easily as<br />

right now once Brexit takes place. Meanwhile, the UK government<br />

discontinued the Tier 1 entrepreneur visa category, replacing it with<br />

the “start-up visa” and “innovator visa” categories, hoping these<br />

will spark economic growth, particularly in the UK’s tech sector.<br />

Austria<br />

Austria has one of the oldest, and, in fairness, one<br />

of the programmes that is held in most esteem.<br />

However, it is also one of the least transparent,<br />

with no clearly defined and predictable path to<br />

citizenship. Little is known about the programme’s<br />

processes nor about the number of applications,<br />

but the programme continues to have its appeal (so we’ve heard).<br />

Flying in the face of Europe’s drive for greater transparency and<br />

sharing of information, it appears that Austria didn’t get the memo.<br />

Thailand<br />

Much like its tourism tagline “Amazing<br />

Thailand”, the country is carving out its own<br />

niche in the market, with retirees looking<br />

to Thailand for their second lease of life.<br />

Initiated by the Thai Government to attract<br />

wealthy travellers, families, investors, and<br />

entrepreneurs, the Thailand Elite Residence Programme offers<br />

applicants extended stays in the country, between five and <strong>20</strong><br />

years, at a one-time cost of approximately $16,000 or $68,000,<br />

depending on the option chosen. While the main target<br />

markets are business travellers needing fast entry and exit in<br />

and out of the country, thus far most demand is stemming<br />

from retirees who, if they stay in Thailand for more than 180<br />

days per year, stand to benefit from an attractive tax regime.<br />

Moldova<br />

Moldova is the other European newcomer<br />

on the investment migration scene. As one of<br />

Europe’s least developed countries, it might<br />

appear an unlikely place for the launch of a<br />

successful citizenship-by-investment programme.<br />

However, the country’s location and cultural mix<br />

definitely holds a very unique appeal. The programme provides<br />

access to 122 destinations, including Russia, the post-Soviet<br />

states and Turkey, while visa-free access to the Schengen area<br />

is the cherry on the cake. It is the first programme of its kind to<br />

offer this unique combination of visa-free travel destinations.<br />

In Focus: Moldova<br />

Iulia Petuhov, Head of the Moldova Citizenship-by-Investment<br />

Programme, lays out the key elements of her country’s programme.<br />

What was the main objective<br />

behind the introduction of<br />

Moldova’s CBI programme?<br />

Moldova is undergoing a comprehensive<br />

process of modernisation<br />

and economic innovation.<br />

However, as is the case with<br />

all sovereign states, we are<br />

in a competitive market for<br />

foreign investment and for the<br />

necessary liquidity that must<br />

be injected into the Moldovan<br />

sovereign balance sheet. This is<br />

where the Moldova Citizenshipby-Investment<br />

Programme<br />

(MCBI) comes in. Not only will<br />

there be a stream of non-debt<br />

bearing capital flowing into our<br />

development fund, but we also<br />

believe that MCBI will act as a<br />

global marketing platform that<br />

demonstrates the value of the<br />

Moldovan economy to potential<br />

FDI investors. We expect that<br />

there will be significant crossover<br />

between MCBI investors and<br />

FDI. The programme is in its<br />

early days; however, MCBI has<br />

a unique proposition in terms<br />

of market access, price point<br />

and the potential for further<br />

investment in a deeply fertile<br />

corporate environment. We are<br />

now seeing our first applications<br />

nearing completion.<br />

What are the big issues that<br />

newly launched programmes<br />

have to deal with?<br />

The core issues that all participants<br />

in the investment<br />

migration industry must publicly<br />

and demonstrably manage are<br />

governance and due diligence.<br />

We should all work together to<br />

ensure a common set of rigorous<br />

standards that demonstrate<br />

how seriously we take these<br />

issues, and possibly develop a<br />

roadmap towards some sort of<br />

supra-national regulation. We<br />

must demonstrate the societal<br />

value creation of the industry,<br />

and also that the industry is at<br />

the same level as international<br />

capital markets when it comes<br />

to KYC and sources of funds<br />

procedures. Secondly, while we<br />

are in a competitive market<br />

place, we believe that demand<br />

for these programmes is so<br />

strong that there is no need<br />

for any programme, Moldova’s<br />

included, to significantly reduce<br />

their fees. We should all have<br />

confidence in the value of the<br />

product. You don’t see investment<br />

bankers drop their fees,<br />

so why should sovereign states?<br />

What sets Moldova’s<br />

programme apart from<br />

its competitors?<br />

We are confident that our offering<br />

will be very attractive<br />

to the global HNWI investor<br />

base. Moldova has a unique<br />

proposition, with visa free<br />

access to Schengen as well as<br />

to the post-Soviet space and<br />

Turkey. We have already seen<br />

applications that are specifically<br />

driven by our unique offering.<br />

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Turkey<br />

Demand<br />

for Turkey’s<br />

citizenshipby-investment<br />

programme<br />

has taken off<br />

spectacularly following a hefty<br />

price-cut in late <strong>20</strong>18. Under<br />

the real estate option, the<br />

minimum investment is now<br />

$250,000 instead of the original<br />

$1 million. The deposit option<br />

decreased to $500,000 from $3<br />

million, and the fixed capital<br />

investment option’s lower limit<br />

is now $500,000, whereas<br />

the original amount was $2<br />

million. Foreigners who would<br />

like to create jobs in exchange<br />

for Turkish citizenship only<br />

need to employ 50 people<br />

instead of 100 as required<br />

previously. One reason for<br />

Turkey’s attractiveness is that<br />

it provides a route to the US<br />

in the face of a growing EB-5<br />

backlog. According to industry<br />

professionals, a growing<br />

number of applicants choose<br />

to first invest in a Turkish<br />

passport and then apply for the<br />

E2 entrepreneur visa through<br />

their new Turkish citizenship.<br />

“Turkey received 250<br />

applicants during the first<br />

year of the programme.<br />

However, given that the<br />

government has significantly<br />

decreased the necessary<br />

minimum amount of<br />

investment in all options, it<br />

is clear that the number of<br />

investors will multiply in the<br />

coming years. Meanwhile,<br />

as Montenegro closes the<br />

chapters one by one to<br />

reach member state status<br />

of the European Union, the<br />

value of the Montenegrin<br />

passport is expected to<br />

increase sharply.”<br />

Laszlo Kiss<br />

Managing Director of<br />

Discus Holdings<br />

The US<br />

Demand for the USA’s EB-5 programme continues<br />

unabated, despite a growing quota backlog for certain<br />

nationalities. Hopes are high that one of the most<br />

successful residence-by-investment programmes<br />

in the world will soon receive a facelift. The EB-5<br />

programme has been running on numerous shortterm<br />

extensions, with the current extension expiring in autumn<br />

<strong><strong>20</strong>19</strong>. However, the industry is optimistic that the programme will be<br />

maintained despite the anti-immigration rhetoric of the ruling political<br />

establishment. Discussions on the modernisation of the programme<br />

are reported to be at an advanced state. The new version of the<br />

programme could see the visa ceiling expand from 10,000 to 50,000<br />

per year, but on the flipside, cost could also increase, with the current<br />

minimum investment of $500,000 going up to north of $1 million.<br />

Malta<br />

As a member of the EU, Malta has been one of the<br />

great success stories of the investment migration<br />

industry. With Malta’s warm and sunny weather,<br />

historic charms and Mediterranean lifestyle, it is easy<br />

to see why the island has become one of Europe’s<br />

top destinations. Malta’s residency-by-investment<br />

programme proved to be a reputable, advantageous and competitive<br />

programme, attracting over 1,500 applications since its introduction<br />

in <strong>20</strong>15, according to the Malta Residency Visa Agency (MRVA).<br />

The country’s citizenship-by investment-programme, the Malta<br />

Individual Investor Programme, is equally successful. Thus far, 900<br />

applicants completed the programme, generating over €760 million in<br />

direct payments to the Government of Malta. Malta’s citizenship-byinvestment<br />

programme has been capped at 1,800 applicants but the<br />

Maltese government has already announced its intention to extend<br />

the programme. However, it is considering more stringent criteria.<br />

Inside the MRVA<br />

Charles Mizzi, the<br />

new CEO of the<br />

Malta Residency<br />

Visa Agency,<br />

provides insights<br />

on the Malta<br />

Residence and<br />

Visa Programme ’s<br />

performance and<br />

shares his thoughts<br />

on the industry’s<br />

way forward.<br />

The Malta Residency and Visa Programme<br />

(MRVP) was introduced in <strong>20</strong>15 in order to<br />

enhance Malta’s sovereign wealth and to<br />

attract foreign, quality talent and investment to<br />

the country, while offering second residency benefits<br />

and international mobility to global citizens.<br />

During the past 18 months, the programme has<br />

seen a huge rise in demand. So far, the programme<br />

has attracted over 1,500 quality applications.<br />

Most applicants hail from China, while we are also<br />

seeing interest from other regions such as the<br />

Middle East, Russia, Turkey, South Africa, and India.<br />

The high application volume has been particularly<br />

challenging to process. Our<br />

primary aim is to find a balancing<br />

act between efficiency and<br />

maintaining the strict processes<br />

we employ to ascertain the<br />

most rigorous of due diligence<br />

checks on all applicants and<br />

their dependants. Integrity is<br />

the be-all and end-all objective<br />

of a sustainable, reputable<br />

programme. The Agency is young<br />

and small, and it has to grow<br />

So far, the<br />

programme<br />

has attracted<br />

over 1,500<br />

quality<br />

applications.<br />

in tandem with the programme’s rapid success. As<br />

the relatively new CEO, this is my priority – to see<br />

the Agency develop and strengthen its operations,<br />

while studying and analysing new opportunities.<br />

We expect the industry to continue on its<br />

growth path, with more countries starting to offer<br />

residence-by-investment opportunities. We believe<br />

that the future of any residence-by-investment<br />

programme depends on strict self-regulation that<br />

upholds the highest of standards. There is no<br />

doubt that the concerns of industry critics and<br />

lobby groups with regard to transparency, security<br />

and good governance are putting pressure on all<br />

countries offering investment<br />

migration programmes. Malta<br />

already implements a rigorous<br />

four-step screening process,<br />

while also adhering to international<br />

anti-money laundering<br />

legislation. However, we understand<br />

these concerns, and<br />

we are ready to share our best<br />

practices for them to become<br />

a benchmark in the industry.<br />

73


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Cyprus<br />

Cyprus’ citizenship-by-investment programme<br />

helped bring the Cypriot economy back to boom<br />

mode. It served as a great boost for the struggling<br />

real estate sector since most investors preferred<br />

to invest in property. However, acknowledging<br />

that some aspects of the programme needed<br />

to be improved, Cyprus recently unveiled a series of reforms.<br />

Among the changes were stricter criteria for applicants who<br />

now need to undergo background checks by a specialised<br />

due diligence firm, the introduction of an annual cap of 700<br />

passport approvals to main applicants, as well as a requirement<br />

for applicants to already be in possession of a Schengen visa.<br />

Estonia<br />

Having successfully broken new ground with<br />

e-residency, Estonia could well be the dark<br />

horse of the investment migration race and<br />

should definitely be on everybody’s watch<br />

list. After attracting almost 55,000 e-residents,<br />

the country is now looking to bring this<br />

level of innovation to providing visa-free travel, which could<br />

well turn out to be a game-changer for global mobility.<br />

Canada<br />

Canada has had a long-term on-off relationship<br />

with the investment migration industry.<br />

Despite being one of the frontrunners<br />

of this industry, the end of the Canadian<br />

Federal Immigrant Investor Program is quite<br />

possibly the single most important factor<br />

that contributed to the success of America’s EB-5 programme.<br />

However, for those wishing to move to a new country, Canada<br />

is still an attractive choice given its multi-cultural, safe<br />

living environment. Quebec is the focal point of Canada’s<br />

investment migration industry. Unlike many of its counterparts,<br />

relocation though is not an optional requirement but a must<br />

for applicants of the Quebec Immigrant Investor Program.<br />

Montenegro<br />

Montenegro’s citizenship-by-investment<br />

programme is probably going to be the next<br />

big European contender in the investment<br />

migration arena, with a lower pricing structure<br />

than many of its European competitors.<br />

Already an Adriatic yachting hotspot with<br />

stunning natural beauty, Montenegro is emerging as a luxury<br />

destination offering interesting investment opportunities,<br />

with some calling it ‘the next French Riviera’. Many in the<br />

investment migration industry believe that Montenegro’s<br />

programme will rapidly gain in importance as the country<br />

moves closer to European Union membership.<br />

Cyprus Update<br />

Michalis P. Michael,<br />

Chairman of Invest<br />

Cyprus, sheds<br />

some light on<br />

the new rules for<br />

Cyprus’ citizenshipby-investment<br />

programme.<br />

Cyprus, as a dynamic business centre, places<br />

great emphasis on attracting foreign direct<br />

investment as a key tool in achieving sustainable<br />

economic growth. The Cyprus Investment<br />

Programme was introduced to continuously reinforce<br />

the reasons why investors choose Cyprus,<br />

acting as a prime incentive for international<br />

investors to not only invest in our country, but<br />

also to make Cyprus their home. The programme<br />

contributed significantly to the recovery and<br />

growth path of the Cypriot economy, while<br />

proving a valuable instrument towards developing<br />

key economic sectors and particularly the real<br />

estate sector, at a time of economic distress.<br />

During the past few years, we have witnessed a<br />

significant upward trend in the global investment<br />

migration industry, raising $14 billion in FDI in <strong>20</strong>18.<br />

However, the industry is also under continuously<br />

increasing attention. For EU countries, this was reflected<br />

in the recent report by the EU Commission,<br />

highlighting concerns over security, control<br />

mechanisms and exchange of information amongst<br />

member states. Cyprus supports all coordinated<br />

action to improve collaboration between EU countries,<br />

but also supports the essence of the country’s<br />

national right to establish its own policies.<br />

On our part, we are constantly implementing<br />

modifications to our programme to ensure and<br />

safeguard its viability, as well as to protect investors.<br />

Last year’s measures included the introduction<br />

of a Code of Conduct for service providers, limiting<br />

applications to 700 per year and establishing professional<br />

due diligence processes for applicants. In<br />

February <strong><strong>20</strong>19</strong>, new modifications were introduced,<br />

including the need to be a holder of a Schengen<br />

Visa in order to apply for naturalisation, the inclusion<br />

of investments in the shipping sector and in<br />

Registered Alternative Investment Funds as eligible<br />

investments, the obligation to maintain the required<br />

investments for a period of at least five years<br />

from the date of naturalisation, and many more.<br />

In addition, an Annual Implementation Report that<br />

includes the number of naturalisations, geographical<br />

area of the applicants and the sector in which<br />

the investments were made, will be prepared for<br />

the sake of transparency and correct information.<br />

We expect that the programme will continue<br />

to attract foreign investment from a variety of<br />

countries; and I am referring to investments of<br />

substance, that forge real ties with the country<br />

and advance Cyprus’ economic growth. Our<br />

efforts are focusing on ensuring significant economic<br />

benefits from the programme, not only<br />

in the real estate and construction activity, but<br />

also in other sectors; and most importantly, in<br />

terms of the real economy. Overall, we do aim<br />

at enhancing cooperation at EU level in this<br />

regard, and we are always at the disposal of the<br />

EU Commission to share information, and ensure<br />

security and transparency in relevant practices.<br />

74


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

The Caribbean<br />

Region<br />

Dubbed the global<br />

capital of ‘citizenshipby-investment’,<br />

the<br />

Caribbean provides<br />

the highest number<br />

of programmes in the<br />

world. The Caribbean<br />

programmes offer a<br />

quick route to citizenship;<br />

applications are usually<br />

approved with three to<br />

four months following<br />

the date of submission.<br />

However, with five<br />

countries operating<br />

programmes – St. Kitts &<br />

Nevis, St. Lucia, Antigua<br />

& Barbuda, Grenada<br />

and Dominica – all<br />

with similar benefits,<br />

clients may find it<br />

hard to distinguishing<br />

one from another.<br />

St. Kitts & Nevis<br />

While St. Kitts & Nevis is<br />

credited with inventing<br />

the concept of economic<br />

citizenship way back in 1984,<br />

the programme is currently<br />

feeling the spotlight of<br />

international media attention as it is facing<br />

allegations of fraud and financial irregularities,<br />

with agents and developers being accused of<br />

offering citizenship at way below governmentsanctioned<br />

rates through real estate trickery.<br />

Antigua & Barbuda<br />

Antigua & Barbuda has<br />

made headlines with its<br />

crypto-friendly stance.<br />

The government has<br />

amended the country’s<br />

citizenship by investment<br />

programme to allow payments in<br />

Bitcoin and other cryptocurrencies.<br />

Dominica<br />

The Financial<br />

Times CBI<br />

Index has<br />

ranked<br />

Dominica’s<br />

citizenship<br />

programme the best<br />

programme for two<br />

consecutive years. Dominica<br />

has continuously focused<br />

its efforts to strengthen its<br />

security checks, introducing<br />

a complex multi-tiered due<br />

diligence process and adopting<br />

legislation and regulations<br />

that match international<br />

standards. One advantage of<br />

Dominica is that dependent<br />

children can be included<br />

up to the age of 30 years.<br />

However, this is also possible<br />

in Grenada and St. Kitts.<br />

“The RCBI<br />

market has<br />

reached<br />

maturity,<br />

while new<br />

entrants<br />

confirm that<br />

the need for<br />

such programmes persists. Ultimately, each<br />

programme positions itself differently, and<br />

thus attracts different kinds of applicants.<br />

As the market expands, the requirements<br />

will also become more complex, and for<br />

governments that operate with a long-term<br />

vision, being able to adapt and respond<br />

proactively is crucial. We are optimistic<br />

about the future of Dominica’s citizenshipby-investment<br />

programme. The focus on<br />

integrity, reputation and transparency is<br />

what maintains Dominica’s unique position<br />

comfortably at the forefront of the industry.”<br />

His Excellency Emmanuel Nanthan<br />

Head of Dominica’s Citizenship<br />

by Investment Unit<br />

75


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

St. Lucia<br />

St. Lucia was a late-comer to<br />

the investment migration scene,<br />

having launched its programme<br />

only in <strong>20</strong>16. Thus far, the<br />

application volume has been<br />

considerably lower than that of<br />

competing Caribbean jurisdictions, and some 330<br />

persons have reportedly been granted citizenship<br />

during the past three years. St. Lucia seeks to<br />

position itself as a holistic lifestyle location and,<br />

going forward, it wants to offer its new citizens<br />

ample opportunities to build get involved in the<br />

economy and create strong ties to the country.<br />

Grenada<br />

Grenada, on the other hand, is<br />

fast establishing a reputation<br />

as the most prudent and<br />

dynamic country for second<br />

citizenship investment in the<br />

Caribbean after appointing<br />

Thomas Anthony, a former due diligence<br />

specialist, as CEO of its citizenship unit.<br />

However, Grenada’s biggest plus is its visa<br />

treaty with the US, which allows Grenadian<br />

passport holders to apply for the E2 visa that<br />

enables one to live, work and study in the USA.<br />

Anguilla<br />

Anguilla is the<br />

new contender<br />

in the region,<br />

having launched<br />

its Residence for<br />

Tax Purposes<br />

(RTP) programme in <strong><strong>20</strong>19</strong>. The<br />

Caribbean island is a British<br />

Overseas Territory (BOT) and<br />

hence cannot create a citizenship<br />

by investment programme like<br />

other Caribbean jurisdictions.<br />

Anguilla has suffered significant<br />

damages from hurricanes, and<br />

the programme is seen as a way<br />

to generate foreign investment<br />

to help with recovery efforts.<br />

Foreign nationals are required<br />

to make an annual lumpsum<br />

tax payment, purchase<br />

property and create genuine<br />

links with Anguilla such as<br />

holding bank accounts. However,<br />

in times of greater scrutiny<br />

and international pressure<br />

on all things tax, Anguilla’s<br />

tax residence programme<br />

still has to prove its worth.<br />

“All applicants to our Residence for Tax<br />

Purposes (RTP) programme will be subject<br />

to a thorough and enhanced due diligence<br />

process. We expect this programme to<br />

grow significantly as the market becomes<br />

more aware of the benefits. It will be<br />

particularly attractive to Canadians, UK<br />

nationals and Europeans who cease to be<br />

tax resident in their home country and<br />

live very international lives that see them<br />

spend on average less than 90 days per<br />

year anywhere in the world but intend<br />

to make Anguilla their tax residence.”<br />

Philip Kisob<br />

CEO of Select Anguilla<br />

3 Questions with…<br />

Jonathan Cardona<br />

CEO of the Malta Individual Investor Programme Agency<br />

Four years since the launch of Malta’s Individual Investor<br />

Programme (MIIP), what have been the results?<br />

The programme has been very successful – around 1,000 families<br />

were approved, of which over 900 completed the programme successfully,<br />

generating over €760 million in direct payments to the<br />

Government of Malta. This means that over €460 million have<br />

been deposited into the National Development and Social Fund<br />

run by an autonomous agency. The functions and duties of the<br />

agency are to contribute towards significant projects of national<br />

importance, supporting advancement in education, research, innovation,<br />

justice, employment, and public health. Furthermore,<br />

approved applicants have also reached out to local NGOs and<br />

philanthropic organisations, making a direct contribution of approximately<br />

€4 million. However, Malta’s economy is not dependent<br />

on the revenues generated through the programme;<br />

they are an additional boost. In recent years, we have been<br />

experiencing GDP growth rates of around 6 to 7%, making Malta<br />

one of the most dynamic economies among all EU countries.<br />

How do you expect the investment migration<br />

industry to evolve over the coming years?<br />

Establishing global and common standards will be the way forward, as<br />

currently, the investment migration industry remains largely unregulated.<br />

This means that the level of international scrutiny is bound to increase.<br />

Malta has been advocating for the introduction of industry-wide<br />

standards ever since its programme was launched, while it remains<br />

one of the few countries that have established an independent regulator<br />

to oversee its operation. To this end, Malta continues to retain the<br />

world’s top citizenship-by-investment programme for the very high<br />

due diligence standards it set up. Recommendations have also proven<br />

that firms and agencies worldwide need to invest heavily in their due<br />

diligence to match this bar; these are much needed efforts that will<br />

help maintain this ongoing success without exposing the industry to unnecessary<br />

risks. The investment migration industry is also looking into<br />

developing professional qualifications as a standard for its employees.<br />

This will help demonstrate that such programmes are a step closer to<br />

reaching the much-needed high standards and a high level of scrutiny.<br />

76


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

Vanuatu<br />

Vanuatu is the only Pacific island nation with a<br />

citizenship-by-investment programme. A former<br />

British and French Colony, Vanuatu remains a<br />

member of the British Commonwealth. While<br />

for many professionals the programme is not<br />

regarded as being in the top tier league, Vanuatu<br />

passport-holders enjoy visa-free travel to more than 1<strong>20</strong> countries,<br />

including the UK, the Schengen Zone and Russia. Vanuatu’s Daily<br />

Post reported that an estimated 1,800 passports were issued via the<br />

country’s citizenship by investment programmes in <strong>20</strong>18 and that<br />

last year on average five people became new citizens every day.<br />

Jordan<br />

A safe haven in a region of conflict, Jordan is one<br />

of the more recent entrants to the investment<br />

migration arena, offering programmes for both<br />

citizenship and residence. While Jordan is<br />

doing well on the tourism front, and has been<br />

repeatedly named as a <strong><strong>20</strong>19</strong> must-visit destination<br />

by travel guides and international media, the kingdom’s decision<br />

to formalise a route to economic citizenship was mainly<br />

motivated by a desire to attract investors to its ailing economy,<br />

which has been severely affected by the conflicts in Iraq and<br />

Syria with public debt approaching $35 billion. However, it<br />

remains to be seen whether Jordan’s programme proves popular<br />

not only for investors from the Middle East but beyond.<br />

New Zealand<br />

New Zealand’s<br />

investor visas<br />

are probably<br />

the industry’s<br />

‘best-kept’<br />

secret.<br />

Although requiring a relatively<br />

large investment amount,<br />

the New Zealand investor<br />

programme offers investors<br />

great flexibility, allowing<br />

applicants to choose from a<br />

wide range of investable assets,<br />

including new residential real<br />

estate developments, bonds,<br />

funds and private or public<br />

company equity. New Zealand<br />

has two investor visas, which<br />

either require an investment<br />

of NZ$3 million or of NZ$10<br />

million, whereby a combined<br />

total of 2,000 applications were<br />

approved since <strong>20</strong>08. While<br />

the country’s new law that<br />

restricts property purchases<br />

by foreigners has hit global<br />

headlines last year, industry<br />

practitioners do not expect it<br />

to have any direct impact on<br />

investor visa applicants as the<br />

law does not affect residential<br />

real estate investment<br />

under the investor visa.<br />

“While demand for Australia is<br />

high and is expected to remain<br />

so, the biggest potential for<br />

growth is in New Zealand.<br />

Many high-net-worth investors<br />

have obtained residency or<br />

citizenship in New Zealand<br />

as a safe country that offers<br />

refuge from many of the<br />

challenges facing other larger<br />

countries such as population<br />

size, water shortages and<br />

climate change. For many New<br />

Zealand is still an undiscovered<br />

country, and the current<br />

lower demand is generally<br />

due to a lack of awareness<br />

of the investment migration<br />

opportunities available.”<br />

James Hall<br />

Managing Director<br />

of ANZ Migrate<br />

What updates and new initiatives<br />

are in the pipeline?<br />

To date, the requirements and regulations have<br />

not changed. However, updates for the programme<br />

will be in place in the near future, which will<br />

reflect the feedback obtained from a public consultation<br />

exercise and from the report issued by<br />

the European Commission earlier this year. We<br />

went through this whole process to ensure that<br />

the updated and revised programme continues to<br />

attract successful individuals who can contribute<br />

to the country, while having in place the necessary<br />

safeguards that would counter any potential risks.<br />

Australia<br />

Australia has become the top destination<br />

globally for migrating high-net-worth<br />

individuals. An estimated 12,000 millionaires<br />

moved to Australia last year, which means<br />

the country has surpassed the USA, which<br />

welcomed 10,000 new millionaires, according<br />

to a report by New World Wealth. Meanwhile, Australia’s<br />

Significant Investor Visa continues to appeal to Chinese<br />

nationals, with the visa number for the permanent residence<br />

visa being subclass 888 – meaning triple fortune in Chinese<br />

numerology. With 88% of applicants in Australia originating<br />

from China, it becomes clear that the Australian government<br />

is prepared to further encourage growth of this market.<br />

Ireland<br />

With a fast-growing economy, an Englishspeaking<br />

environment and EU member<br />

status, Ireland has become one of the<br />

most preferred residence-by-investment<br />

destinations. Recently released figures show<br />

that the Irish Immigrant Investor Programme<br />

has approved 700 applications and has raised more than<br />

€500 million since opening in <strong>20</strong>12. The large majority of<br />

investors – more than 90% – are Chinese, with Americans<br />

coming in a very distant second, accounting for only 2%.<br />

77


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

ROUND<br />

TABLE<br />

How to<br />

Work<br />

Together,<br />

How to<br />

WIN<br />

Together<br />

Three due diligence experts share their<br />

thoughts and opinions on how teamwork and<br />

intelligence can be a winning combination<br />

for the investment migration industry.<br />

La AS KK<br />

Laura Austin<br />

Senior Manager, Head of<br />

Investment Migration Due<br />

Diligence at BDO Consulting<br />

Adam Skowronek<br />

Head of EDD Case Management<br />

and Client Consulting for<br />

EMEA at Refinitiv<br />

Karen Kelly<br />

Director of Strategy &<br />

Development at Exiger Diligence<br />

78


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

How would you describe<br />

the current operating<br />

environment in the<br />

investment migration industry<br />

for due diligence providers?<br />

The investment migration industry is enjoying<br />

AS<br />

exponential growth, with more potential applicants<br />

becoming interested in participating in the programmes, and<br />

more programmes becoming available. The need for adequate<br />

due diligence practices has been recognised in the industry,<br />

and many agencies have significantly improved their practices<br />

in this regard. However, with the increased competition<br />

and push for a faster, more seamless application process,<br />

the industry is requiring due diligence service providers to<br />

propose a viable, competitive and comprehensive product.<br />

Indeed, the importance of due diligence in the investment<br />

La<br />

migration industry has never been more emphasised<br />

or better understood. Much of the recent increased emphasis<br />

placed on due diligence stems from heightened industry<br />

scrutiny, which has helped to highlight the necessity of<br />

comprehensive and robust due diligence. As the importance of<br />

due diligence is further highlighted to this industry, there has<br />

been an influx of new due diligence providers to the market.<br />

This is a reflection not only of the increased emphasis on due<br />

diligence, but also of the growth of the industry as a whole.<br />

KK<br />

I have personally been involved in due diligence for<br />

this industry for more than 10 years, and what I have<br />

witnessed during that time is an increasing level of engagement.<br />

We, at Exiger, are working closely together with our programme<br />

partners and we are discussing methodology, reporting and<br />

analysis, with an increasing emphasis on technology. Our<br />

clients are actively taking part in determining the best due<br />

diligence approach for them to facilitate decision-making. I<br />

hope to see that becoming the norm across all programmes.<br />

ROUND<br />

TABLE<br />

What issues are currently<br />

high on your agenda?<br />

I think that the industry has a good level of understanding<br />

AS of the importance of a comprehensive and robust<br />

due diligence process, but the practical aspects of how to<br />

achieve and maintain the highest quality of background<br />

verification still remain unclear for too many agencies. We<br />

are working tirelessly to educate agents and governments<br />

operating investment migration programmes, to guide<br />

them on best practices in due diligence, whilst also listening<br />

closely to their specific concerns and requirements.<br />

KK<br />

Exiger is working with programmes not only on thirdparty<br />

due diligence, but also on building and maintaining<br />

robust and efficient compliance programmes that can stand<br />

up to regulatory scrutiny now and in the future. This includes<br />

providing advice on best practices and standard-setting, as<br />

well as offering technological solutions to automate efficient<br />

workflows and manage high volumes of applicant information,<br />

due diligence and ongoing monitoring of applicants.<br />

Our priorities as a due diligence stakeholder closely align<br />

La<br />

with the priorities of the investment migration industry,<br />

and advocacy efforts are at the top of our agenda. BDO is a<br />

participant in the <strong>IM</strong>C’s Special Task Force (STF), and we are<br />

eager to participate, along with our industry counterparts, in<br />

the establishment of due diligence industry standards and in<br />

the drafting of specialist reports. We understand the significant<br />

responsibility we have through our position as a major due<br />

diligence provider, and we view these efforts as essential to the<br />

protection of the industry and in the interest of all parties.<br />

79


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

ROUND<br />

TABLE<br />

What are the key KYC and<br />

AML challenges faced by<br />

programme operators and<br />

agents, and how do you<br />

help address them?<br />

We firmly believe that ongoing monitoring after initial<br />

KK<br />

due diligence is a key challenge of KYC across the<br />

board today. Risk analysis is another important challenge<br />

faced by those in this industry – the main question remains<br />

how to employ a risk-based approach that is defensible<br />

before regulators in order to evaluate applicants’ suitability.<br />

Exiger offers assistance to programmes through a number<br />

of means to address this challenge, including offering a<br />

comprehensive ‘risk matrix’ with our due diligence findings, and<br />

organising an advanced due diligence course for programme<br />

staff with a focus on employing a risk-based approach.<br />

AS<br />

I’d like to point out that the investment migration industry<br />

remains largely unregulated from an AML perspective.<br />

In the European Union, the 5th Anti-Money Laundering<br />

Directive of <strong>20</strong>18 requires enhanced customer due diligence<br />

on third-country nationals who apply ‘for residence rights or<br />

citizenship in the Member State in exchange of capital transfers,<br />

purchase of property or government bonds, or investment<br />

in corporate entities in that Member State’. Nevertheless,<br />

many other agents operating <strong>IM</strong> programmes elsewhere<br />

in the world remain unregulated. This is why the best KYC<br />

and due diligence standards need to be shared among the<br />

practitioners to improve the overall due diligence process<br />

within the industry. Service providers such as Refinitiv have<br />

the unique experience and understanding of both the KYC<br />

requirements and best practices from the financial services<br />

industry, and so we play a vital role in educating agents and<br />

operators within the investment migration sector in this regard.<br />

What are the key areas<br />

that need to be considered<br />

as part of a due diligence<br />

process, and to what extent<br />

is the scope of due diligence<br />

widening today to incorporate<br />

new areas of assessment?<br />

Ongoing, real-time monitoring of applicants after the<br />

KK<br />

initial due diligence report has been delivered, is becoming<br />

an increasing need for programmes. This is something more<br />

sophisticated due diligence providers can offer. For a defined<br />

period following initial due diligence, regular monitoring for<br />

serious red flags can alert programmes to potential reputational<br />

concerns with an applicant, so that they are in a position to<br />

proactively respond. In more general terms, programmes are<br />

increasingly recognising the need for comprehensive inquiries,<br />

such as site visits and reputational checks that go beyond what<br />

they may have previously done in-house. Desktop web searches<br />

and traditional sanction as well as watchlist screening alone are<br />

not enough to stand up to the increasing scrutiny on the industry.<br />

We agree that the scope of due diligence is widening<br />

La<br />

today through the application of ongoing monitoring<br />

solutions that serve to extend the ‘shelf life’ of the initial due<br />

diligence investigation. It has existed in the financial services<br />

industry for many years, and while it is a relatively new concept<br />

to the investment migration industry, the implementation of<br />

such a solution is seen as a best practice for RCBI programmes.<br />

At BDO, we approach our due diligence with a wide lens,<br />

encompassing research pertaining to the specific applicants,<br />

as well as research on their surrounding and influencing<br />

factors, businesses, associates, and sources of wealth. Other<br />

areas of our research pertain to an applicant’s reputation;<br />

personal, professional and political affiliations; and criminal,<br />

civil and fraud issues, to name a few. This wide research lens,<br />

coupled with our risk-based approach and an eye towards<br />

behavioural patterns, leads us to uncover the most relevant<br />

and significant findings during the course of our research.<br />

I would mention the three most important elements in<br />

AS<br />

CBI/RBI-oriented background verification research: the<br />

confirmation of the applicant’s identity; their risk profile; as well as<br />

the validity of the source of their wealth (SOW). While the first two<br />

are arguably straightforward, the scope of a comprehensive source<br />

of wealth assessment has grown exponentially over the past few<br />

years, including assessment of the subject’s known assets, reported<br />

versus estimated value of the real estate properties, individual<br />

salary, as compared to the industry estimate, detailed directorship<br />

and employment records, source of wealth of immediate family<br />

members and ancestors. It should also be noted that SOW<br />

research is always inherently tied to risk research, since every<br />

negative article found may have a significant effect on the wealth<br />

profile assessment. It would therefore not be enough to keep the<br />

risk scope limited to only sanction lists, AML/TF and political<br />

exposure, but expand it to litigation, regulatory, bankruptcy and<br />

law enforcement checks, as well as all-encompassing public<br />

domain research, including a widest possible selection of search<br />

engines, corporate information databases, and news aggregators.<br />

80


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

AI-powered tools are fast<br />

becoming the new standard.<br />

What risks and opportunities<br />

do they represent? Could<br />

you provide an insight into<br />

other tools and technologies<br />

that are playing an<br />

important role today?<br />

The due diligence research process can be roughly divided<br />

AS<br />

into data acquisition and data interpretation. Recent<br />

advancements in AI-powered recognition of natural language<br />

allows for progressively faster public domain scrubbing, where<br />

relevant information pertaining to the applicant is readily<br />

presented to a research analyst. With the significant increase<br />

of digitised information and the increased volume of data in<br />

recent years, the tools that facilitate faster and more precise<br />

research are of utmost importance to the due diligence process.<br />

For example, litigation checks for applicants from China could<br />

take weeks if conducted manually, but with robotic desktop<br />

applications, the research through vast datasets can be performed<br />

within hours by machine, and only the relevant information<br />

remains to be analysed by humans. Another example where<br />

AI technology proves exceedingly useful is seamless passport<br />

or identity verification – with facial recognition technology<br />

becoming more and more advanced, the document and digital<br />

identity verification, which remain the core components of<br />

the due diligence process, becomes faster and more precise.<br />

Although it is true that AI has a lot of benefits, there is<br />

KK a misconception that AI might wholly replace human<br />

analysts. Indeed, with AI the routine tasks of data collection<br />

and risk categorisation have become more automated. It can<br />

be harnessed to understand language and context. AI can<br />

be refined to eliminate “noise” such as duplicates and false<br />

positives. It can also follow leads and be taught to extract<br />

data from deep web sources. AI can monitor thousands of<br />

sources in multiple languages and create alerts for new red<br />

flags, continuously refining a comprehensive risk profile for<br />

an applicant. However, the most notable AI-powered tools<br />

consist of a seamless collaboration between human and<br />

artificial intelligence to permit a person to exercise critical<br />

thinking and analysis in the most efficient manner.<br />

We agree that AI-powered tools alone do not constitute<br />

La<br />

a sufficient or holistic solution. For due diligence to<br />

be at its most comprehensive and sophisticated, there is a<br />

requirement for both enhanced due diligence processes<br />

utilising local intelligence sources, coupled with far-reaching<br />

technology products, to include continuous monitoring<br />

solutions. A hybrid, ‘people+’ approach, using both technology<br />

and human intelligence, allows for the most comprehensive<br />

intelligence that is subject to thoughtful human interpretation<br />

and the critical analysis of the results. This type of due<br />

diligence solution satisfies industry best practices.<br />

Immigrant investor programmes<br />

have slightly different due<br />

diligence requirements. Does<br />

the industry need to agree<br />

on a common standard, and<br />

how could this be achieved?<br />

We do see differing standards amongst programmes, and<br />

KK<br />

this can be around a number of due diligence elements<br />

including jurisdictional scope, the level of reputational inquiries<br />

and documentation checks. The differences may be a result of<br />

budgetary constraints, the risk profile of applicants, or other factors.<br />

A minimum agreed-upon common standard could benefit the<br />

industry in terms of transparency and industry reputation. Setting<br />

such standards would involve more than an agreed scope list - it<br />

would entail a close examination of due diligence methodology<br />

and reporting standards by due diligence providers, as well as a<br />

review and comparison of required documentation and disclosures,<br />

after which a baseline could be established across programmes.<br />

The lack of AML regulation and KYC specific guidance<br />

AS<br />

puts the industry at higher risk of money laundering, tax<br />

evasion and fraud, particularly because of the international reach<br />

of the programmes. While minor differences in requirements<br />

are likely to appear among <strong>IM</strong> agencies on a regional basis,<br />

a high global standard of due diligence in citizenship and<br />

residence investment programmes needs to be achieved.<br />

Due diligence services firms need to come together with the<br />

agents and operators to share best practices and set minimum<br />

requirements. One such initiative is the cooperation between<br />

the Investment Migration Council and due diligence firms to<br />

continue educating agencies on best practice and encourage<br />

them to cooperate so that no singular oversight diminishes the<br />

industry’s reputation as a whole or threatens national security.<br />

Overall, I’d say the industry is moving in the right<br />

La<br />

direction with regards to establishing common due<br />

diligence standards, and in light of the joint advocacy efforts<br />

and STF established by the <strong>IM</strong>C, the participating due<br />

diligence providers will be collaborating and working together<br />

to establish best practices for the industry. This collaboration<br />

will require in-depth research, transparent sharing of due<br />

diligence processes and coordinated identification of the<br />

best practices for the industry as a whole. Successful sharing<br />

and collaboration at both the programme- and due diligence<br />

provider-levels will work to enhance the overall quality of<br />

due diligence programmes, and will add to the ways in which<br />

we can further protect the investment migration industry.<br />

81


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

From a due diligence<br />

perspective, what else<br />

can be done to improve<br />

the industry’s reputational<br />

image and risk profile?<br />

The two most important factors are strong programme<br />

La<br />

governance, including consistent and transparent due<br />

diligence practices, and a coordinated public relations approach.<br />

It is the responsibility of the programmes and industry as<br />

a whole to organise a coordinated and calculated strategy<br />

aimed at educating the public, and improving the overall<br />

reputation of the industry. This strategy should be built on<br />

the idea of transparency between the industry and the global<br />

community. Consistently communicating positive industry<br />

headlines to the public through strong PR representation<br />

will be crucial to shifting—albeit slowly— the general<br />

understanding and perception of investment migration.<br />

Transparency is key – not only with regards to due<br />

KK<br />

diligence scope and methodology, but also in how<br />

applicants are evaluated both during the application process and<br />

beyond. Some programmes can be more proactive in describing<br />

their due diligence standards and in engaging experienced and<br />

reliable due diligence providers able to meet those standards.<br />

Programmes should also be transparent with regard to any<br />

ongoing monitoring that is performed on approved applicants,<br />

the technology employed to monitor, how frequently monitoring<br />

occurs, and the kinds of red flags that elicit a response by the<br />

programme. Beyond that, increased transparency around the<br />

risk appetite of programmes, use of innovative technologies such<br />

as artificial intelligence, and the methodology used to assess<br />

risk and suitability of applicants, may help silence critics.<br />

We agree transparency will always be an important part<br />

AS<br />

of the industry. Immigration investment schemes have<br />

been accused of being a gateway for bad players and illicit funds,<br />

often times due to occasional shortcomings of insufficient due<br />

diligence processes. Since the programmes have gained more<br />

momentum in the public eye and more readily available to<br />

a much greater pool of potential applicants, agencies should<br />

strive to be perceived as hallmarks of comprehensive due<br />

diligence consumers, working together and with diligence<br />

providers, to establish a better reputation of the industry as<br />

a whole. The best due diligence standards should be applied<br />

globally by all industry members, and increased transparency<br />

of the sector would improve the industry’s image too.<br />

Obtaining information on<br />

private individuals and their<br />

sources of wealth can be more<br />

challenging depending on<br />

the jurisdiction. How do your<br />

particular research processes<br />

deal with this situation?<br />

Any complete and exhaustive due diligence exercise starts<br />

AS<br />

with robust understanding of information and nature of<br />

sources available in any given jurisdiction, particularly countries<br />

with limited online data availability. Comprehensive desktop<br />

research should always be complemented by inquiries with<br />

local registrars, litigation and regulatory bodies to eliminate<br />

any information gaps and provide a complete profile of the<br />

applicant’s source of wealth. In less transparent jurisdictions,<br />

where the access or objectivity of obtainable information<br />

may be breached, the information collected through human<br />

intelligence remains of critical importance. While comprehensive<br />

industry enquiries will not equal the information obtained<br />

through registrar checks, they often bring in great value in terms<br />

of background information or fill in the gaps of the desktop<br />

research process, providing a comprehensive background<br />

check of the verification of the subject’s true net worth.<br />

We approach source of wealth in a number of different<br />

KK<br />

ways to present the clearest overall picture to our client.<br />

This includes attempting to verify declared information<br />

concerning shareholdings, employment, real estate, and<br />

other assets; obtaining information on the business activities<br />

of affiliated companies; using AI to scour open sources and<br />

subscription databases for information directly related to<br />

wealth and income; and consulting human sources. Every<br />

piece of an applicant’s wealth history is not always in the<br />

public record, but through these various tools and techniques<br />

we are able to triangulate a powerful wealth ‘story’ that can<br />

be compared with the story presented by the applicant.<br />

La<br />

Generally, we examine a few key areas that provide insight<br />

on an individual’s financial position and source of wealth.<br />

While the process we follow and the specific sources of this type<br />

of information change from jurisdiction to jurisdiction, and also<br />

largely depend on the public availability of records, our in-country<br />

intelligence resources are aware of local laws and sources, and<br />

they follow the best methods for obtaining as much information<br />

as is available to paint a picture of the applicant’s source of wealth.<br />

82


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

How do you expect the<br />

due diligence practice<br />

to develop in the years<br />

ahead? What changes do<br />

you anticipate in terms of<br />

regulatory requirements,<br />

strategies and techniques?<br />

The landscape of international due diligence is<br />

La<br />

continually shifting and changing, as new technologies<br />

are developed, sources of information come and go, and<br />

regulatory requirements regarding data privacy change. The<br />

most impactful of these variables to the due diligence process<br />

is likely changing regulatory requirements, and we anticipate<br />

that other countries will soon enact GDPR-like regulations,<br />

resulting in the alteration or complete closure of certain<br />

information sources. If this type of regulation does in fact<br />

get enacted, the source information on which due diligence<br />

relies is likely to change in many countries. What this means<br />

to the due diligence process will vary from country to country,<br />

and we will have to wait and see what the initial impacts<br />

will be. In general, given the number of variables existing<br />

in international due diligence, providers have learned to be<br />

flexible, adaptable and creative, and despite of changing external<br />

factors, programmes can count on providers to be aware of the<br />

changes, to adapt in the best way possible, and to always have<br />

the best interest of the investment migration industry at heart.<br />

More players are now understanding what the external<br />

AS<br />

due diligence service provider role is and what part of the<br />

process needs to be completed in-house. While the public domain<br />

checks and human intelligence collection and analysis can be<br />

outsourced to due diligence service providers, the documented<br />

decision-making process remains a responsibility that cannot be<br />

outsourced. More expertise will be applied internally among the<br />

agencies operating investment migration programmes to cater<br />

for this part of the due diligence process. Externally, the service<br />

providers collecting background verification information will all<br />

need to move towards a faster and more precise service, which<br />

can be achieved with the technologically advanced research and<br />

analysis tools. The increased transparency requirement combined<br />

with the scrutiny of the public eye will lead to better due diligence<br />

and documented decision-making processes globally, which in<br />

turn will lead to stricter and more secure processes preventing the<br />

abuse of the programmes and the improved perception of these.<br />

This industry is such that there is change every day,<br />

KK<br />

either with regards to the availability of information, new<br />

technologies, client expectations, or regulatory requirements.<br />

We are constantly looking to new resources and tools to<br />

mitigate against any future changes in terms of publiclyavailable<br />

information. We will also continue to invest in and<br />

adapt technology into our due diligence process to make<br />

research more automated and efficient, which means having<br />

more resources available to devote time to analyse and identify<br />

risk. It is looking like the industry will move towards the<br />

adoption of minimum due diligence standards; developing<br />

efficiencies now will better position us to offer cost-effective<br />

solutions to our clients to meet those requirements.<br />

What would be your one<br />

piece of advice to programme<br />

operators and agents?<br />

My advice would be to engage in very transparent<br />

La<br />

relationships with due diligence providers to<br />

ensure the agreed-upon level of due diligence is being<br />

met, and also to publicise their commitment to robust due<br />

diligence programmes, in order to help alter the global<br />

perception of investment migration. In light of the scrutiny<br />

and challenges currently facing the industry, it is the<br />

responsibility of all interested stakeholders to participate in<br />

some capacity in the greater reputation-focused efforts.<br />

KK<br />

Ask due diligence providers questions. It is important<br />

to understand their methodology, sources, technology,<br />

and compliance — how they are going about confirming or<br />

obtaining certain information — as well as the limitations.<br />

We encourage the programmes with which we work to ask<br />

us questions, and we are as transparent as possible when it<br />

comes to the resources used, how we confirm information<br />

in a compliant manner, and the limitations of what we can<br />

confirm. When a programme is evaluating an applicant and<br />

consulting a due diligence report, they should understand<br />

exactly what steps a provider took to, for example, verify the<br />

existence of a business, so that they can better quantify the risk.<br />

Never underestimate the value of risk management.<br />

AS<br />

While the enhanced due diligence process may seem<br />

difficult to implement initially, the stakes are extremely high<br />

with threats to national and international security, the risk<br />

of fraud and money laundering, damage to the reputation of<br />

the programmes and the entire industry. Due diligence is the<br />

key solution to ensuring programmes are safe and not abused<br />

by criminals, and that they can be implemented or improved<br />

easily because of the available expertise and the willingness to<br />

share best practices and knowledge among industry actors.<br />

ROUND<br />

TABLE<br />

83


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

CITIZENSHIP BY INVESTMENT:<br />

The Real Drivers<br />

Behind Applications<br />

Civil unrest, visa-free travel and statelessness are just a few of the<br />

reasons behind the recent uptake in applications for citizenship and<br />

residency by investment (CRBI). S-RM analyst Sonia Spencer explains<br />

the current environment around these sought-after programmes.<br />

Source: Henley & Partners Passport Index<br />

In recent months, the CRBI industry<br />

has been the backdrop for controversy.<br />

Bulgaria revoked the citizenship<br />

of Russian telecoms millionaire Sergei<br />

Adoniev who had been convicted of fraud<br />

in the United States in the 1990s. In March,<br />

the European Parliament voted to phase out<br />

CRBI programmes.<br />

As a due diligence provider for several CRBI<br />

programmes globally, S-RM knows first-hand<br />

that the recent CRBI headlines paint a skewed<br />

picture. This is particularly true for applicants<br />

from the Middle East, whose profiles, in fact,<br />

closely mirror the wider global political, security<br />

and economic trends in the region. The volume<br />

of CRBI applications jumped significantly after<br />

the <strong>20</strong>11 Arab Spring, as citizens tried to escape<br />

worsening security across the region. From major<br />

Iraqi cities, applications now regularly come<br />

from engineers and surgeons who are unable to<br />

gain secure employment at home, after years of<br />

conflict and instability. Similarly, middle-class<br />

Syrians are drawn to CRBI options due to the<br />

country’s civil war.<br />

84


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

While citizens of areas of major civil unrest,<br />

not surprisingly, tend to be subject to restricted<br />

international movement, business travellers and<br />

expats from these regions choose to apply for<br />

CRBI programmes in order to gain better employment<br />

and education opportunities. A Syrian<br />

surgeon living and working in Qatar is ineligible<br />

for Qatari citizenship, which is strictly patrilineal,<br />

transferred by blood through the male line.<br />

However, travelling for business is difficult on<br />

a Syrian passport, which grants visa free travel<br />

to only 32 destinations; and obtaining a visa<br />

can be difficult with many countries cautious<br />

that Syrians will then claim refugee status. The<br />

surgeon also cannot return to Syria to renew his<br />

passport due to safety concerns. The stark differences<br />

in opportunity afforded by different passports<br />

is illustrated by the Henley Passport Index,<br />

a ranking for free movement. In this ranking,<br />

Iraq, Syria and Lebanon are placed in 104th, 103rd<br />

and 97th place, respectively. This means that<br />

Lebanese citizens, for example, can access only<br />

44 out of 195 countries without a pre-arranged<br />

visa. Of these, 14 are small island nations — including<br />

Niue, the Pitcairn Islands and Tuvalu<br />

— not known for their education or business<br />

opportunities. A European or Commonwealth<br />

affiliated CRBI programme is therefore highly<br />

appealing.<br />

Sonia Spencer<br />

is an Analyst<br />

at S-RM, a<br />

global risk consultancy<br />

that helps clients manage<br />

regulatory, reputational<br />

and operational risks. S-RM<br />

provides background check<br />

due diligence and training<br />

support to citizenshipby-investment<br />

and<br />

investor-visa programmes<br />

run by government<br />

agencies worldwide.<br />

Statelessness is another reason for CRBI applications.<br />

When the UAE was founded in 1971,<br />

those who couldn’t prove their presence at unification,<br />

or lacked the necessary tribal affiliations<br />

were not allowed to claim UAE citizenship. NGOs<br />

have estimated the number of stateless individuals<br />

in the UAE to be between 10,000 and 100,000<br />

people — numbers which persist due to patrilineal<br />

citizenship laws, assigning statelessness to<br />

the children of stateless parents. With the necessary<br />

financial backing, many are understandably<br />

drawn to apply for CRBI programmes to escape<br />

statelessness for themselves and their children.<br />

Particularly for Middle East applicants, the<br />

coverage of CRBI programmes by newspapers<br />

and politicians requires more nuance. Criminals<br />

do apply, as do controversial oligarchs. Stringent<br />

due diligence investigations are essential to keep<br />

out the minority of criminals and other fraudulent<br />

applicants. But the very large majority of<br />

applicants reviewed by S-RM are professionals<br />

and business owners from countries such as Iraq,<br />

Syria, Yemen and Lebanon. Most apply not as a<br />

cover for illegal activity but because they want<br />

better employment and education opportunities.<br />

This is a far less headline-grabbing narrative. It is<br />

also much more reflective of the motivations of<br />

applicants from some of the world’s least secure<br />

and most unstable countries.<br />

85


<strong>IM</strong><br />

INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

The Big Read<br />

Disrupting<br />

the Nation State<br />

Children born today will grow up with a radically different<br />

understanding of how governments should serve them, writes<br />

Kaspar Korjus, the former head of Estonia’s e-Residency Programme.<br />

86


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

“As a<br />

consequence,<br />

governments like<br />

ours in Estonia<br />

are evolving fast<br />

into borderless<br />

digital nations in<br />

order to better<br />

serve and benefit<br />

from the rise<br />

of these new<br />

world citizens.”<br />

I’ve been thinking a lot about the future<br />

recently. Partly because it was a requirement<br />

for my job — as the former head of<br />

Estonia’s e-Residency Programme — but<br />

more importantly, it’s because my wife has<br />

given birth to our first child. My wife and I grew<br />

up during the collapse of the Soviet Union and<br />

the rebirth of Estonia as a free country, followed<br />

by the rapid reforms that led to it become the<br />

world’s most advanced digital nation. However,<br />

I firmly believe that our son is going to grow up<br />

through even more interesting and transformative<br />

times in the years ahead. Despite much of<br />

the negativity in the news right now, the overall<br />

trend appears to be positive for the opportunities<br />

that await him and other children entering<br />

our world right now. The internet and other advances<br />

in digital technology are enabling more<br />

people to live and work globally with greater<br />

freedom, independent of any fixed location. As<br />

a consequence, governments like ours in Estonia<br />

are evolving fast into borderless digital nations in<br />

order to better serve and benefit from the rise of<br />

these new world citizens.<br />

Back to the Future<br />

It’s completely understandable if you are wary<br />

of any attempt to predict the future though.<br />

Most predictions are not usually very accurate.<br />

Consider the movie Back to the Future 2, which<br />

I’m looking forward to watching with my son<br />

soon. It’s a prediction of <strong>20</strong>15 that was made in<br />

1989. In their vision of the future, all technology<br />

has advanced to the next level — so cars can fly,<br />

skateboards can hover, and clothes can talk — but<br />

people’s lives are actually still stuck in the 1980s.<br />

The problem is that we tend to focus on how<br />

technology will advance, but not on how that<br />

new technology will alter the way we live our lives<br />

in more fundamental ways.<br />

In one scene, a family is sitting round a<br />

dinner table while the children are absorbed<br />

with their devices, including one that looks like<br />

Google Glass. So far, this is quite well predicted<br />

— as people with more parenting experience<br />

than me will know only too well. However, all of<br />

the devices suddenly start ringing together, and<br />

the daughter then looks up to say “dad, it’s for<br />

you”. So the movie correctly predicted the proliferation<br />

of (what seem to be) internet connected<br />

devices, but couldn’t imagine the transformative<br />

impact they would have. It’s obvious to us today<br />

that there wouldn’t be a single home phone line<br />

anymore because our communications are now<br />

individualised. As if to reinforce my point, the<br />

future Marty McFly then says he’ll take the call<br />

next door, before trying to hide messages coming<br />

through on the family’s ‘futuristic’ fax machines.<br />

This demonstrates how we keep projecting our<br />

existing ways of thinking onto our visions of<br />

the future, and fail to see the most significant<br />

changes before they happen.<br />

So to predict the future, we need to think<br />

less about advanced new technology, and more<br />

about new ways of thinking, enabled by technology.<br />

We must embrace the reality that concepts<br />

we consider entirely normal now could rapidly<br />

change — or disappear entirely.<br />

I believe we haven’t fully appreciated how<br />

the internet is about to change our world in other<br />

ways too. Perhaps the most important industry<br />

about to undergo digital disruption is governance.<br />

Our concept of nations might seem permanent<br />

to us now, but these are relatively new<br />

concepts, and they are not immune to disruption<br />

either. It is this change that I believe will have the<br />

furthest reaching impact during my son’s lifetime.<br />

The Evolution of Nations<br />

For millions of years, humanity was restricted to<br />

small groups of nomadic hunters and gatherers<br />

until new innovations enabled us to farm in fixed<br />

locations. As a consequence, human settlements<br />

began to grow, and yet more innovations were<br />

required — such as currencies — to govern these<br />

communities and enable people to diversify into<br />

different societal roles. Those settlements grew by<br />

trading and interacting with each other, and then<br />

even larger structures of governance emerged<br />

to oversee this. The biggest reorganisation then<br />

took place with the industrial revolution, which<br />

further concentrated our communities in evergrowing<br />

cities that could manufacture on a large<br />

scale, to meet the demands of large populations.<br />

From this, our nations were born.<br />

This is where we are now — a very small<br />

period in human history in which the world’s<br />

population has been restrained by geographic<br />

boundaries. A nation is assigned to us at birth,<br />

and then it usually stays with us for life. This<br />

random allocation of the world’s population determines<br />

our life opportunities more than almost<br />

any other single factor. That wouldn’t make sense<br />

for any other aspect of our lives though.<br />

Take Facebook groups, for example. There<br />

are Facebook groups for almost every area of<br />

interest in the world. But imagine if you were<br />

assigned a Facebook group at birth, then had to<br />

remain within that specific online community for<br />

the rest of your life — unless you went through a<br />

lengthy and expensive process to switch to a different<br />

group. The abundance of Facebook groups<br />

is undoubtedly a good thing, but they work<br />

better when everyone has the freedom to choose<br />

which ones they want to join and contribute to.<br />

Personally, I wouldn’t want to be stuck in a flat<br />

earth group!<br />

In a similar way, different nations have different<br />

values and opportunities too. It’s only relatively<br />

recently that large numbers of people on<br />

our planet have gained the power to travel, communicate<br />

and trade across borders. I take this<br />

freedom for granted now, but my parents could<br />

only dream about these opportunities when they<br />

were my age. Now I’m the one dreaming about<br />

the even greater freedoms ahead of us if we can<br />

choose nations as easily as Facebook groups.<br />

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<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

“The main<br />

advantage<br />

of being an<br />

e-resident right<br />

now is the ability<br />

to start and run a<br />

trusted locationindependent<br />

EU<br />

company with<br />

minimal cost<br />

and hassle. ”<br />

Our nations are now undergoing a digital revolution,<br />

which will radically reshape them once<br />

again — this time into borderless online communities<br />

with services that can be accessed anywhere<br />

there is an internet connection. Consider<br />

the fact that Estonia already offers almost every<br />

public service online. As Estonian President<br />

Kaljulaid recently pointed out, Estonia is the first<br />

digital society with its own state, although plenty<br />

more will follow.<br />

That’s why we launched e-Residency, in order<br />

to scale up our digital nation by offering our services<br />

to even more ‘users’ around the world. The<br />

main advantage of being an e-resident right now<br />

is the ability to start and run a trusted locationindependent<br />

EU company with minimal cost<br />

and hassle. So we are essentially exporting our<br />

business environment to those who don’t have<br />

the same advantages as us. However, this is only<br />

the start. I recently asked what would happen<br />

if Estonia offered ‘estcoins’ to e-residents for<br />

example, and the Head of our Tax Board speculated<br />

that e-residents could one day be offered<br />

services, such as health cover and pensions, paid<br />

for through personal taxation.<br />

We now receive frequent visits from policymakers<br />

in other states who are interested in<br />

learning from the success of ‘e-Estonia’, and even<br />

launching their own e-Residency programmes.<br />

If all countries could attract members online as<br />

easily as Facebook groups, then they can develop<br />

unique selling points for their own e-services.<br />

This digital development is good for everyone,<br />

everywhere, because it will improve the quality of<br />

governance globally if people can freely choose<br />

which nation they want to access e-services from.<br />

For a glimpse of that future, let me tell you about<br />

my son’s experience.<br />

Welcome to Ruufus’ World<br />

Our child was given his ID number almost immediately<br />

after he was born into our advanced<br />

digital nation of Estonia. This forms the basis<br />

for his secure digital identity, which he will use<br />

throughout his life for authenticating himself<br />

online, and accessing e-services from both the<br />

public and the private sector. While we were<br />

busy admiring our new child at the hospital, the<br />

doctor was busy entering the first data about him<br />

into our state’s Population Registry — such as his<br />

name, sex, date of birth, and the fact that we are<br />

his parents.<br />

This information is really useful straight<br />

away because various parts of government would<br />

need it to better serve us as new parents, such as<br />

by scheduling health checks, supporting with<br />

child care and allocating our parental leave allowance.<br />

This would generate added hassle for<br />

new parents in most countries, but in Estonia<br />

the information begins flowing automatically<br />

between departments and agencies along our<br />

secure, decentralised information network<br />

known as the ‘X-road’. When we got home from<br />

the hospital and finally took our eyes off our child<br />

long enough to open up a computer, we logged in<br />

using our own secure digital identities, and used<br />

our permission as parents to add one more vital<br />

bit of data — his name, Ruufus. This is his story so<br />

far, but it’s going to get far more interesting.<br />

By the age of 7, Ruufus will be starting school<br />

to learn to read, write and code, like all other children.<br />

That doesn’t mean we expect him to code<br />

an app one day, any more than we expect him to<br />

write a novel; but these are the basic skills that he<br />

will need to understand the world around him.<br />

Ruufus’ time at school will coincide with rapid<br />

advances in the development of artificial intel-<br />

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ligence and blockchain technology, and this will<br />

be used by governments to make smarter decisions,<br />

and deliver vastly more efficient public services.<br />

Ruufus probably won’t have the option of<br />

a career in the civil service ahead of him, but he<br />

will instead prepare for new jobs that we can’t yet<br />

begin to imagine. His schoolwork will be set and<br />

completed digitally and — unfortunately from<br />

his perspective now— that means we’ll always<br />

know if he has homework to do.<br />

Ruufus won’t just grow up in our digital<br />

nation, but also in a truly digitalised world<br />

where e-services are trusted by everyone, and<br />

offline concepts like ink signatures, scanning<br />

and posting will seem absurdly old fashioned. I<br />

know this seems scary to many people around<br />

the world now, but our experience in Estonia<br />

has given us the opposite perspective. Storing<br />

important personal data on paper isn’t just inefficient.<br />

It’s also dangerous. In contrast, we can see<br />

exactly who is accessing our digital data and then<br />

challenge any use that we consider to be unjustified.<br />

Blockchain-like technology is already being<br />

used to protect our health records by providing<br />

a public ledger, which can never be altered or<br />

erased.<br />

By the age of 15, Ruufus might want to start<br />

earning his own money for the first time. He<br />

won’t need to restrict his employment opportunities<br />

to local businesses however, as it will<br />

be just as easy to collaborate with people (and<br />

instantly get paid by them) on the opposite side<br />

of the planet. Cryptocurrencies currently show<br />

no sign of disappearing, so it is more likely that<br />

they will have evolved by then into viable decentralised<br />

currencies in which he’ll want to<br />

receive payments. That means governments will<br />

have needed to figure out how to accept (and<br />

tax them) at this point too. But perhaps governments<br />

don’t have to ‘tax’ Ruufus by then anyway.<br />

Governments can instead earn their main source<br />

of income by selling their services globally in the<br />

form of monthly subscriptions — much like how<br />

Netflix currently delivers its service. We would<br />

have to ensure that this is done in a way that<br />

improves the welfare of everyone, such as those<br />

in need of healthcare. By using smart contracts<br />

based on blockchain technology for example,<br />

Ruufus could start allocating his money directly<br />

to those that need it with greater transparency<br />

and efficiency, without the need for government<br />

middlemen.<br />

At age 18, Ruufus might want to go explore<br />

the world for himself. Fortunately, he won’t have<br />

to save up his money or do too much planning<br />

first because so much of his life will already be<br />

location-independent, including his source of<br />

income. This is already the reality for an increasing<br />

number of ‘digital nomads’ today, but Ruufus<br />

will have the added opportunity to choose which<br />

nations he wants to serve him globally. The rise<br />

of Estonia as a leading digital nation came as a<br />

surprise to many, so perhaps Ruufus will also<br />

choose to be an e-resident of nations that seem<br />

surprising to us now because developing nations<br />

that embrace digital disruption could quickly<br />

overtake developed countries that don’t.<br />

Like me, I hope Ruufus will always be proud<br />

to be Estonian; but everyone benefits from increased<br />

engagement with other countries. He<br />

could choose to run a company in Botswana to<br />

access the emerging African business environment.<br />

He could choose to pay personal taxes (or a<br />

subscription) to South Korea to benefit from their<br />

world leading health cover and social protection.<br />

During his <strong>20</strong>s, Ruufus might want to settle<br />

in one location, or live across many. One very important<br />

difference to most people today though<br />

is that he can make this decision more freely<br />

without the need to live next to his place of work<br />

or study. Remote work is already acceptable in<br />

many industries, and it will soon become the<br />

norm. This will help alleviate some of the biggest<br />

challenges of modern life today, such as the stress<br />

and expense of living in crowded cities, as well as<br />

the pressures caused by migration.<br />

Consider the disruptive impact of elevators,<br />

for example. Before they were introduced, the<br />

upper floors were the least desirable because<br />

they were the least accessible; but now it is the<br />

opposite. In a similar way, Rufus might not feel<br />

the need to migrate to London or Berlin in order<br />

to find work. I do hope he has even more freedom<br />

to travel than me; but he could also enjoy the<br />

freedom to access opportunities from around the<br />

world — while living in our beautiful Estonian<br />

countryside, if he so wishes.<br />

In 30 years time, Ruufus will have been building<br />

up his pension through his subscriptions to<br />

Japan, but he may also have enough money to<br />

invest more heavily in a country of his choice.<br />

Right now, ‘investing in a country’ just means investing<br />

in property and businesses within a particularly<br />

country. Ruufus, however, might have<br />

the option to literally invest in a country.<br />

After examining white papers from various<br />

countries, Ruufus could choose to invest in crypto<br />

tokens issued by the one with the best plan for<br />

the future. Perhaps Ruufus enjoyed visiting the<br />

tiny island nation of Fiji during his travels and<br />

now wants to invest in their digital development.<br />

In the digital era, there will be no reason why<br />

nations can’t scale up and achieve vast growth<br />

in the same way that great start-ups do today. If a<br />

nation like Fiji can use the investment to deliver<br />

services that solve people’s problems globally,<br />

then the country could achieve astronomical<br />

growth.<br />

Ruufus has an enormous head start in this<br />

emerging digital world, where far too many<br />

people currently face financial exclusion because<br />

the services they need are either unaffordable or<br />

unavailable in their location. By the time he is<br />

older than me though, I hope those advantages<br />

that we enjoy as Estonians will be available to<br />

everyone. n<br />

89


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Interview Kaspar Korjus, Former Head of<br />

Estonia’s e-Residency Programme<br />

The Big Picture Idea:<br />

Nation as<br />

a Service<br />

Estonia’s e-Residency Programme is partly the brainchild of<br />

Kaspar Korjus, the former Head of the Programme. He talks about<br />

the programme’s start-up phase, major achievements and its future<br />

potential. He says that as more countries build digital services of<br />

their own, the idea of nation-as-a-service comes into sharper focus.<br />

Can you give us a brief introduction<br />

to Estonia’s e-Residency Programme<br />

and tell us how it came about?<br />

Estonia is a small country, with a population of<br />

just 1.3 million. After the collapse of the Soviet<br />

Union, when we regained our independence<br />

in 1991, we were faced with the challenge of<br />

scaling up our nation. We looked to technology<br />

to improve our competitiveness in the absence<br />

of any other meaningful natural resources. We<br />

modernised and digitised many of the old analogue<br />

systems, and carved out a niche as a hub<br />

for tech start-ups. E-Government was also high<br />

on the agenda. A digital ID card was introduced<br />

that gives access to a wide range of e-services, including<br />

making payments, accessing full health<br />

records and online voting.<br />

We then developed the idea to take this<br />

concept a step further by giving people from<br />

across the world access to our public and<br />

private online facilities – and the e-Residency<br />

Programme was born. E-residents are allowed to<br />

open a business in Estonia and run it remotely,<br />

while accessing many of our e-services. The idea<br />

was to make life and business easier for freelancers,<br />

digital nomads, business owners, and entrepreneurs,<br />

working in a diverse range of sectors,<br />

including IT, financial services and travel.<br />

How was the Programme received initially?<br />

We launched the e-Residency Programme in<br />

<strong>20</strong>14, and at first, it wasn’t an easy sell. There was a<br />

lot of scepticism in Estonia about who would actually<br />

want to be an e-resident of our country. We<br />

had to change 10 plus laws, which means politicians<br />

and policy-makers questioned the concept.<br />

We were also not sure if the Programme would<br />

be a success, but we realised we were onto some-<br />

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After gaining<br />

a BSc and MSc<br />

in e-Business<br />

at Lancaster University,<br />

Kaspar returned to<br />

Estonia. He started<br />

working on e-Residency<br />

in <strong>20</strong>14, when it was little<br />

more than an idea in the<br />

minds of a few people.<br />

He spearheaded the<br />

Programme and served as<br />

its Managing Director until<br />

the end of <strong>20</strong>18. Today, he<br />

advises governments on<br />

e-services and is available<br />

for keynote speeches.<br />

thing when we attracted the attention of world<br />

business and opinion leaders, and got the international<br />

media to talk about e-Residency. Among<br />

the first foreign e-residents were Edward Lucas,<br />

Senior Editor of the Economist, and American<br />

venture capitalist Tim Draper. These early adopters<br />

bought into the concept more than anything<br />

else because initially we did not have many services<br />

on offer. It was only when the programme<br />

took off that we started developing a suite of services<br />

for Estonia’s e-residents.<br />

Since the launch of the programme, our e-<br />

resident population has grown to approximately<br />

50,000 people in 160 countries. The majority<br />

of them are from Finland, Russia, Ukraine,<br />

Germany, the USA, UK, Japan, China, and India;<br />

but the programme is increasing Estonia’s reputation<br />

all over the world. From a political point of<br />

view, this fits our national security policy, which<br />

is based on building international alliances and<br />

raising global awareness of our country.<br />

What services can e-residents access and<br />

what types of people are making use of it?<br />

E-Residency cannot be compared to any other<br />

residency product or citizenship. E-Residency<br />

does not confer citizenship, tax residency, residence,<br />

or right of entry into Estonia or to the<br />

European Union. It is not a visa or residence<br />

permit. Once approved as e-residents, foreigners<br />

receive a digital ID, which gives them digital<br />

access to services such, as a company creation<br />

and banking and payments, while they can digitally<br />

sign documents and contracts. E-Residents<br />

can also access Estonian government services for<br />

businesses. The Programme has been designed<br />

with location-independent entrepreneurs in<br />

mind, but it also proved particularly attractive<br />

to people who are financially excluded or disadvantaged.<br />

For example, we saw a surge in interest<br />

from Turkey when PayPal stopped operating<br />

there. Many don’t realise that there is a huge<br />

group of people who cannot sell their products<br />

and services on the digital marketplace because<br />

they cannot access certain apps and financial services.<br />

What economic impact does the<br />

Programme have on Estonia?<br />

Not all e-residents contribute taxes to Estonia, but<br />

when they do it is because they set up a company<br />

that is legitimately tax resident in Estonia. Many<br />

e-residents also generate economic activity when<br />

they use our business environment, and conduct<br />

business with other Estonian companies and<br />

service providers. Estonia has never been a tax<br />

haven, but rather an administrative haven.<br />

E-residents have created some 6,600 companies<br />

in Estonia and, according to an economic<br />

impact analysis by Deloitte conducted in <strong>20</strong>17,<br />

have contributed €14.4 million to the Estonian<br />

state and economy. This figure is projected to<br />

reach almost €2 billion by <strong>20</strong>25, based on the forecasted<br />

growth of the e-resident population.<br />

How do you see the concept evolving further?<br />

Last year, a roadmap for e-Residency 2.0 was<br />

launched, which mainly aims to improve the<br />

current services, make the system more efficient,<br />

and help more Estonian companies and<br />

industries serve e-residents. One idea is the creation<br />

of an Estonian school-franchising model<br />

that would create a global network of Estonian<br />

schools, which offer a certain standard of education<br />

for e-residents’ children. This might be<br />

particularly attractive to digital nomads. Another<br />

idea is to collect social tax from digital nomads<br />

to provide health insurance cover, and access to<br />

a pension fund.<br />

We have also looked at the concept of a digital<br />

nomad visa, which would give digital nomads<br />

the ability to stay in Estonia for one year but also<br />

give access to a 90-day Schengen Visa to enable<br />

them to live and work in the EU. However, the introduction<br />

of such a visa is still being discussed,<br />

and it remains to be seen whether it will become<br />

a reality.<br />

In my opinion, e-Residency is just the first<br />

step towards a model that can be described as<br />

‘nation-as-a-service’, whereby nations offer different<br />

services and citizens can choose what<br />

services they would like to use from a particular<br />

nation. People are becoming more global<br />

and borderless, but there are no nations that are<br />

global. This means that there is a huge demand<br />

for new services and solutions, and governments<br />

could become service providers like any other<br />

company. n<br />

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<strong>IM</strong><br />

INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Simon Anholt, Adviser and Publisher of the Good Country Index<br />

Make a<br />

REAL<br />

Global Impact<br />

Simon Anholt says<br />

the investment<br />

migration industry<br />

needs to become a<br />

force for good if it<br />

wants to win over the<br />

industry’s critics.<br />

Can you tell us a bit about your research<br />

into global perceptions of nations? Can<br />

countries influence their image?<br />

No, they cannot, at least not through public relations<br />

and marketing campaigns. However,<br />

many governments believe they can, and this<br />

may be partly my fault. I came up with the term<br />

‘nation brand’ in 1996. My original observation<br />

was that the reputations of countries behave like<br />

the brand images of companies and products.<br />

Unfortunately the term gradually morphed into<br />

“nation branding”. Nation branding sounds as<br />

if the image of a country can be manipulated or<br />

influenced, but countries are definitely not in<br />

control of their images. I have been compiling the<br />

Nation Brands Index, a huge annual poll of international<br />

perceptions of countries, since <strong>20</strong>05, and<br />

it shows that there is absolutely no correlation<br />

between what countries say about themselves<br />

and how people perceive them. Yet the notion<br />

that a country can simply advertise its way into a<br />

better reputation has proved to be a resilient one.<br />

So what do countries and governments<br />

wanting a better image need to do?<br />

Countries are judged by what they do, not by<br />

what they say. While it is possible and necessary<br />

to market certain economic sectors and products,<br />

such as a tourism destination, an investment opportunity<br />

or the export of goods, governments<br />

cannot influence the overall image of their<br />

country simply by launching a PR or marketing<br />

campaign. These campaigns are nothing more<br />

than government propaganda, which people<br />

rightly ignore. Countries can only improve their<br />

image by changing the way they behave. If a<br />

country wants to be admired, it must be admirable,<br />

and it must make itself relevant to people<br />

from other nations. This means that the country<br />

must participate usefully, productively, and imaginatively,<br />

in the global conversations on the topics<br />

that matter to people elsewhere and everywhere.<br />

The list of those topics is a long one, and it includes,<br />

amongst others, climate change, poverty,<br />

migration, economic stability and human rights.<br />

There is plenty of research that shows that this<br />

investment can pay off: for example, a 1% improvement<br />

in a country’s image can lead to a 38%<br />

increase in foreign direct investment.<br />

Governments that have introduced RCBI<br />

programmes have come under increased<br />

scrutiny in recent years, with international<br />

organisations, policy-makers and the<br />

public often being critical of its concepts.<br />

What’s your view of the industry?<br />

In my opinion, selling residence and citizenship<br />

should be viewed as an economic activity just like<br />

any other. It is a new form of foreign investment<br />

for countries and a useful additional source of<br />

foreign income. From an economic point of view,<br />

it can either be justified or not justified. If it generates<br />

more revenue for the country than it costs,<br />

economic objections against it cannot be valid.<br />

In fact, most objections are not based on economic<br />

grounds, but rather have a socio-cultural<br />

subtext. For many people, belonging to a nation is<br />

a sacred thing, which should not be shared with<br />

people who weren’t born into that nation or who<br />

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haven’t been through a certain amount of trouble<br />

to be part of it. My personal view of this attitude<br />

is that it demonstrates one of the worst sides of<br />

human nature, a flat refusal to share one’s good<br />

fortune with those less fortunate than oneself.<br />

The better side of human nature would be that if<br />

you are lucky enough to live in a rich country, you<br />

should be happy to share your good fortune with<br />

others if it doesn’t materially diminish your own<br />

prosperity or opportunities.<br />

On an EU level, we often hear the argument<br />

that passport and visa programmes offered<br />

by one member state affect the entire<br />

European Union and that these programmes<br />

are effectively exploiting an EU right.<br />

This argument also doesn’t make any sense at all.<br />

Let’s look at another example. If a company from<br />

one member state builds a factory in another<br />

member state and starts polluting the air in that<br />

member state, they are exploiting EU rights in<br />

the same way, aren’t they? It might sound as if I<br />

am defending the investment migration industry.<br />

I have no interest in doing so; however, to me<br />

it seems ethically inconsistent that RCBI programmes<br />

are viewed differently than any other<br />

activities that countries engage in order to attract<br />

capital. The entire debate shows that humanity<br />

has yet to learn to transfer its loyalty to an entity<br />

larger than the nation state. In my opinion, this<br />

has to happen soon. We live in an age where<br />

we are facing gigantic global challenges, from<br />

climate change to migration to terrorism. They<br />

are all international challenges, and need to be<br />

tackled internationally.<br />

Can you explain this a bit more?<br />

Today our problems are not national; they are<br />

global, yet only a minority of people feel loyalty and<br />

commitment to something bigger than their own<br />

country. My research has shown that only about<br />

10% of the world’s population is what you might<br />

call naturally cosmopolitan. Those are people that<br />

distinctively feel they are members of the human<br />

race first, and citizens of their own nation second.<br />

The majority of people are still stuck on the idea<br />

of the nation state, which was invented in 1648. We<br />

went through an enormous amount of trouble to<br />

fix people’s loyalty to the nation state. Wars were<br />

fought over the nation state; active brainwashing<br />

took place to win people’s loyalty for something<br />

that was artificially created. To be clear, I am not<br />

talking about the love that we feel towards the<br />

land that we grew up in, such as a region with its<br />

distinctive landscapes and its people. The love for<br />

one’s country can be profound and meaningful,<br />

and is entirely different from loving your nation,<br />

which is more like saying you love your country’s<br />

government or its army.<br />

The European Union is the noblest experiment<br />

in the history of humanity: it was the first<br />

time in history that a large number of countries<br />

had the wisdom and maturity to give away<br />

Simon<br />

Anholt is an<br />

independent<br />

adviser to various Heads<br />

of State and Heads of<br />

Government, and during<br />

the last <strong>20</strong> years has<br />

advised 55 countries on<br />

strategies for enhanced<br />

economic, political and<br />

cultural engagement<br />

with other countries. He<br />

devised the concept of<br />

nation brand in 1996,<br />

and is the founder and<br />

publisher of the Anholt-<br />

IPSOS Nation Brands<br />

Index, a large annual<br />

opinion poll that measures<br />

international perceptions<br />

of countries. He also<br />

launched the Good Country<br />

Index in <strong>20</strong>14: the first<br />

ever study of what each<br />

country contributes to the<br />

common good of humanity,<br />

and what it takes away,<br />

relative to its size. Simon<br />

Anholt has served as Vice-<br />

Chair of the UK Foreign<br />

Office’s Public Diplomacy<br />

Board and has a Master’s<br />

Degree from the University<br />

of Oxford. He holds an<br />

Honorary Professorship<br />

in Political Science and<br />

is the author of six books<br />

including two best-sellers.<br />

His TED talk launching<br />

the first edition of the<br />

Good Country Index has<br />

been viewed more than<br />

5.5 million times and was<br />

ranked the fifth ‘most<br />

inspiring’ TED talk ever.<br />

a tiny part of their sovereignty in return for the<br />

common good. This is one of the reasons why I<br />

am so bereaved at the UK’s decision to leave the<br />

EU. But even the EU is basically a self-interest<br />

society: it is still defending its members against<br />

competition from the rest of the world. It still<br />

looks inwards. Of course, 26 countries looking<br />

collectively at their own interests is a whole lot<br />

better than 26 countries looking separately at<br />

their own interests; but if we continue like this,<br />

we will be defeated by climate change, migration<br />

and terrorism, and other global challenges.<br />

The only way we are going to tackle them is by<br />

working collectively, and the investment migration<br />

industry might be able to play a role in this.<br />

How would you see that happening?<br />

I think it would be a fascinating idea if one could<br />

convert the idea of investment migration into<br />

something internationally useful, which doesn’t<br />

only benefit the country that is running the programme<br />

but also creates broader benefits. The<br />

industry needs a global approach, and much like<br />

countries, if it wants to be internationally recognised<br />

as a force for good, it needs to become a<br />

force for good. As a start, countries could agree<br />

to accept a certain number of economic migrants<br />

and refugees to match the number of investment<br />

migrants they are allowing in their country.<br />

But the real opportunity is much bigger than<br />

this. Very wealthy people are increasingly philanthropic.<br />

I reckon that one could have a very<br />

fruitful summit with all those investors who are<br />

interested in better residence or citizenship arrangements<br />

for themselves, as well as in supporting<br />

good causes. They could be brought together<br />

with countries operating these programmes, as<br />

well as with NGOs and representatives of the<br />

international community. We know that investment<br />

migration results in a substantial flow of<br />

capital, but instead of directing this capital flow<br />

from one country to another, we could see how<br />

that revenue stream could be best distributed to<br />

solve some of the most pressing global problems,<br />

while delivering the payback to the investors that<br />

they require.<br />

What do you think of the idea<br />

of nation as a service?<br />

It is great concept because it is attempting to<br />

separate out and neutralise the crazy emotions<br />

that people feel about nationality, and regards<br />

the state as what it really is: a set of services. It is<br />

just being cool-headed about it, and that’s what<br />

we need in our current age of global challenges.<br />

I think the task for the future is to find a narrative<br />

that brings nationalists and internationalists<br />

together. The idea that nationalists and internationalist<br />

have to be enemies has emerged in<br />

the last 10 years and appears to have been very<br />

broadly accepted, which is odd because you<br />

couldn’t imagine a better case for cooperation,<br />

given the challenges that we are facing. n<br />

93


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Khalid Koser, Executive Director of the Global Community Engagement and Resilience Fund<br />

The Big Migration Debate: Finding the Missing Link<br />

The migration debate is complex and emotional. Investment migration<br />

only accounts for a small part of worldwide migration, yet the industry<br />

has the potential to help shape a more productive discussion.<br />

Few issues excite controversy like migration, and when global<br />

leaders in Europe, the US and other parts of the world,<br />

discuss migration, they usually talk about threats rather than<br />

opportunities. “But the reality is most countries around the world<br />

need migrants to fill vital gaps in their workforce and to keep their<br />

economies going”, says Khalid Koser, Executive Director of the<br />

Global Community Engagement and Resilience Fund (GCERF).<br />

While refugees might be the face of migration in the media and<br />

in public perception, the large majority of the world’s 258 million<br />

migrants have moved across borders voluntarily. What worries<br />

Koser most is that “we are quickly losing the<br />

space for a sensible, honest and informed debate<br />

about migration. There is a polarisation of views,<br />

between those who champion migrants and see<br />

all refugees as heroes, and those at the other end<br />

who believe all migrants, and especially wealthy<br />

migrants, are criminals. Of course, the truth is<br />

somewhere in between, and one of the key challenges<br />

is to overcome these generalisations”.<br />

Most voluntary migrants are working-age<br />

adults and can actively contribute to economic<br />

growth in their destination countries. For businesses,<br />

their different and complementary skills<br />

can positively influence innovation and enhance<br />

productivity. Research even shows that many<br />

times immigrants actually work harder than<br />

their native hosts. Obviously, Koser says, it would<br />

be hard to argue on a purely economic case for<br />

countries to take in migrants - there always will<br />

and has to be a humanitarian element. “But I<br />

think we need to cross the red line that has been<br />

somewhat drawn between humanitarian and<br />

economic arguments.”<br />

Migration of the Highly Skilled<br />

He stresses that there is a compelling case for<br />

countries to counter intolerance towards migrants,<br />

especially when it comes to attracting<br />

highly skilled migrants. “For them it is not all<br />

about salaries, they are mostly after higher<br />

living and working standards, including good<br />

healthcare, educational opportunities for their<br />

children and, most importantly, a safe living environment.”<br />

According to Koser, countries that<br />

cannot get on top of xenophobia will simply lose<br />

out on the global competition for talent, because<br />

the people that they want to attract will simply<br />

not want to live in an environment that is hostile<br />

towards foreigners of all shades.<br />

So what can governments do to bring their<br />

people along? Koser says the issue for politicians<br />

is that “the topic of migration is almost toxic.<br />

The downsides for them are greater than the<br />

upsides”. He sees the reason for this in the fact<br />

that migration certainly costs in the short term,<br />

Dr Khalid<br />

Koser is<br />

Executive<br />

Director of the Global<br />

Community Engagement<br />

and Resilience Fund. An<br />

academic by training,<br />

Khalid is Professor of<br />

Conflict, Peace and<br />

Security at the University<br />

of Maastricht, as well as<br />

non-resident fellow at<br />

the Brookings Institution,<br />

Chatham House, and the<br />

Lowy Institute. As a global<br />

advocate for migrants and<br />

refugees, Khalid chairs the<br />

World Economic Forum<br />

Global Future Council<br />

on Migration, edits the<br />

Journal of Refugee Studies,<br />

and was appointed MBE for<br />

services to asylum seekers<br />

and refugees. He chairs<br />

the Board of Trustees<br />

for the sustainable<br />

development charity<br />

Raleigh International.<br />

especially when countries have to deal with a large inflow of migrants<br />

due to wars and economic crises. However, there is ample<br />

academic evidence that in the long term, migration, and the successful<br />

integration of migrants into the job market, pays off. “The<br />

trouble is that politicians think in four to five year cycles, and there<br />

are easier ways to win votes than making a credible case for the<br />

long-term benefits of migration.”<br />

According to Koser, it would be beneficial if corporates, business<br />

leaders and even immigrant investors openly champion the<br />

debate. “If they speak out and showcase why migration and a<br />

diverse workforce was beneficial for their businesses<br />

and the economy, I am sure people would<br />

listen.” The discussion also needs to move away<br />

from philosophies, such as multiculturalism and<br />

assimilation, and focus on the more practical<br />

aspects such as giving migrants the chance to get<br />

a job, which then translates into wider opportunities.<br />

This, he says, is particularly true for the<br />

22.5 million refugees, who often spent many years<br />

in refugee camps where they are being cared for<br />

in terms of accommodation and food, but “what<br />

they really want is work”. Koser sees great opportunity<br />

for companies and institutions to utilise<br />

refugee skills to a much wider extent. This could<br />

include anything from manufactures tasking<br />

refugees with basic assembly jobs, to providing<br />

them with access to IT equipment and technology.<br />

This would allow them to carry out data processing,<br />

translation and online education jobs,<br />

and perhaps even writing code for companies<br />

around the world. “There is no end to what could<br />

be done, and this would also give refugees access<br />

to up-skilling initiatives and the opportunity for<br />

a better life.”<br />

Making a Positive Impact<br />

Besides, more research is required about ways to<br />

influence politics and perceptions that are clearly<br />

misinformed. “My advice would be to look to<br />

other areas of public policy and countries where<br />

confidence plummeted after a crisis. Take Japan,<br />

which managed to re-build confidence in its<br />

economy after the nuclear disaster.” Then there<br />

are other ways to bridge the gap between humanitarian<br />

and economic arguments, between<br />

burden and benefit. “Investment migration just<br />

accounts for a small percentage of overall migration,<br />

but it generates significant funds, which in<br />

part could be used to address some of the causes<br />

of migration such as famine, poverty and climate<br />

change.” It is unrealistic to believe that migration<br />

can be stopped completely, according to Koser.<br />

Therefore, it is important that countries find<br />

ways to cope with it, and investment migration<br />

can become part of the solution. n<br />

94


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

John Marcarian, Founder of Expatland Global Network<br />

Expatland:<br />

The World’s Most Influential Country<br />

Expats may account for just 3% of the world’s population, but they are<br />

changing the world and reshaping societies — and their dominance<br />

is growing as expats are expected to account for a larger share of<br />

the world’s population in the decades ahead, says John Marcarian.<br />

If Expatland were a country, it would have<br />

a population of 244 million people, which<br />

would make it the fifth largest in the world.<br />

Expatland is growing at a fast rate of 300,000<br />

people a month, and includes a mixture of nationalities:<br />

nine million Americans, three million<br />

Germans, and more than one million Aussies, to<br />

name a few. This virtual country is hosting the<br />

most productive citizens, which, according to John<br />

Marcarian “are the 3% changing the world”.<br />

Expatland arose from John’s personal expat<br />

journey — a long-time expat himself, Marcarian<br />

understands that moving to a new country isn’t<br />

something that comes without challenges. With a<br />

mission to help facilitate a smooth transition into<br />

the new life of an expat, he wrote the Expatland<br />

book in <strong>20</strong>15, with information and practical<br />

advice on taxes, education, cultural differences,<br />

retirement, and local laws.<br />

95


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

Supporting Expats<br />

In <strong>20</strong>18, Marcarian launched the Expatland<br />

Global Network, an organisation that provides a<br />

one-stop-shop for all the services an expat needs<br />

for a smooth integration, to support people who<br />

are looking to join the expatriate community in<br />

various cities and regions across the globe.<br />

The Expatland Global Network is made up of<br />

Expatland teams. E-teams consist of professionals<br />

who provide support, services and products, which<br />

fall into four categories: tax and finance; health<br />

and wellness; logistics; and lifestyle. Operating at<br />

a city level, each E-team operates under the leadership<br />

of a group leader, responsible for ensuring<br />

that a client has a good experience as he or she<br />

moves through the team, which delivers all the<br />

essential local knowledge relevant to a specific<br />

location. “Expatland is a free of charge service for<br />

the expat — our clients don’t even need to sign up<br />

to become a member, we simply introduce them<br />

to service providers, which then charge the usual<br />

fees,” Marcarian explains.<br />

“We launched Expatland less than a year ago<br />

and it has already spread to many global locations,<br />

with more than 16 E-Teams in Singapore,<br />

Sydney, Hong Kong, Los Angeles, Budapest,<br />

Frankfurt and London, amongst others, with<br />

a goal to have 50 E-Teams by the end of <strong>20</strong><strong>20</strong>,”<br />

Marcarian says.<br />

There are two types of Exapatland members:<br />

a global executive and a global founder establishing<br />

a company or moving a business across<br />

borders. “Our customer base is diverse, with<br />

clients coming from Europe, the Asia-Pacific,<br />

Africa and the US,” Marcarian says. “Potentially,<br />

I believe there can and should be a collaboration<br />

between Expatland and the RCBI industry,<br />

given that moving abroad for any reason necessitates<br />

the interaction between the expat and the<br />

local E-Team. I believe there would be demand,<br />

though we have not yet developed the channel.”<br />

John<br />

Marcarian is<br />

a chartered<br />

accountant, international<br />

tax advisor, and the<br />

founder of both CST Tax<br />

Advisors and Expatland.<br />

At CST, he provides tax<br />

consultancy to clients in<br />

multi-markets, including<br />

global expatriates and<br />

businesses moving across<br />

borders. Based on his<br />

knowledge of common<br />

expat issues and his own<br />

experience as a widely<br />

travelled Aussie expat,<br />

John wrote the Expatland<br />

guide book in <strong>20</strong>15.<br />

Global Dominance<br />

Expatriates contribute significantly to the countries<br />

they move to — the skills they bring, the taxes<br />

they pay, and the jobs they fill; these positive contributions<br />

to host economies cannot be ignored,<br />

and according to Marcarian, global growth rests<br />

on the shoulders of expats. “Expatriates bring<br />

with them a unique set of skills, international experience,<br />

and contacts, diversifying the local talent<br />

pool. In fact, our research reveals that immigrants<br />

add to the GDP of the country they are moving to<br />

regardless of their socio-economic status. In addition<br />

to contributing to economic output, expatriates<br />

have a strong impact on society as a whole,”<br />

he says. “Take Atlanta for example, there are<br />

50,000 Germans living in the city. They brought<br />

their knowledge, skills and ideas, which means<br />

they affect local culture, food, and even the local<br />

way of doing things.”<br />

Future Outlook<br />

“Expatland is destined to grow with the potential<br />

to become the third largest country in the world,”<br />

says John Marcarian. The latest revised projection<br />

is that the number of international migrants<br />

will exceed 405 million by <strong>20</strong>50, or nearly 7% of<br />

the global population — and Marcarian says he<br />

will not be surprised, as it seems that a recordbreaking<br />

number of people want to be expats:<br />

“Research from Gallup World Poll reveals that<br />

750 million people around the world would move<br />

to another country if they could.”<br />

E-Teams have already been established in<br />

some of the top expat destinations, with many<br />

more cities launching in <strong><strong>20</strong>19</strong>. “Our network is<br />

growing quickly, and we are actively looking<br />

for new destinations to expand to, typically the<br />

top expat cities,” Marcarian says. So where do<br />

expats want to live? The answer is all over the<br />

world, but the richest metropolitan areas tend to<br />

attract a larger number of expats. “The majority<br />

of potential migrants would like to move to the<br />

US, followed by London and other bigger cities.<br />

However, a number of new locations emerged<br />

recently, including Austin, Abu Dhabi, and Doha<br />

— wherever you have a strong economy, you see<br />

expats being attracted.”<br />

“Overall, the rise of China has had a major<br />

impact on our members and the cities in which<br />

we are planning to expand our network. The Belt<br />

and Road Initiative spans all the way from China<br />

to Europe by land and by sea routes; it also includes<br />

countries like Sri Lanka and Kenya. It is<br />

bringing new investment and massive infrastructure<br />

projects that will transform the key locations,<br />

making them the most cosmopolitan and<br />

multicultural cities in the world,” Marcarian says.<br />

“However, if we look at the biggest market for<br />

us to develop, it’s definitely Africa. Africa holds<br />

much promise — it has arguably become the<br />

world’s most attractive investment destination,<br />

and African economies offer tremendous opportunities.<br />

We have just developed our first E-Team<br />

in Kenya, and potentially, there are 55 countries<br />

to look into in terms of company expansion.” n<br />

96


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

events<br />

CALENDAR OF UPCOMING<br />

<strong><strong>20</strong>19</strong>-<strong>20</strong><strong>20</strong><br />

97


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

EVENTS<br />

<strong><strong>20</strong>19</strong>-<strong>20</strong><strong>20</strong><br />

The Investment<br />

Migration Forum<br />

DATE & VENUE<br />

03-06 June <strong><strong>20</strong>19</strong> - Geneva<br />

The Investment<br />

Migration Forum<br />

DATE & VENUE<br />

13-14 June <strong><strong>20</strong>19</strong> - Beirut<br />

ORGANISED BY<br />

The Investment Migration Council<br />

ORGANISED BY<br />

Promoteam<br />

WEBSITE<br />

investmentmigrationforum.org/<br />

WEBSITE<br />

promoteam.me/rendez-vouz/<br />

cbipf-beirut-<strong><strong>20</strong>19</strong>/<br />

Global Investment<br />

Immigration<br />

Summit <strong><strong>20</strong>19</strong><br />

DATE & VENUE<br />

21 June <strong><strong>20</strong>19</strong> - Johannesburg<br />

ORGANISED BY<br />

BLS Global<br />

WEBSITE<br />

events.citizenshipinvestment.org<br />

<strong><strong>20</strong>19</strong> AILA/GMS<br />

Annual Global<br />

Immigration Forum<br />

DATE & VENUE<br />

16-18 June <strong><strong>20</strong>19</strong> - Orlando<br />

ORGANISED BY<br />

The American Immigration<br />

Lawyers Association (AILA)<br />

WEBSITE<br />

agora.aila.org/Conference/Detail/1554<br />

Caribbean<br />

Investment<br />

Summit <strong><strong>20</strong>19</strong><br />

DATE & VENUE<br />

19-22 June <strong><strong>20</strong>19</strong> - St. Kitts<br />

ORGANISED BY<br />

Citizenship by Investment<br />

Programmes Association (CIPA)<br />

WEBSITE<br />

cis<strong><strong>20</strong>19</strong>.events<br />

IIA Autumn<br />

Conference<br />

DATE & VENUE<br />

<strong>20</strong> September <strong><strong>20</strong>19</strong> - London<br />

ORGANISED BY<br />

IIA<br />

WEBSITE<br />

iiaconference.com<br />

Global Investment<br />

Immigration<br />

Summit <strong><strong>20</strong>19</strong><br />

DATE & VENUE<br />

21 September <strong><strong>20</strong>19</strong> - India<br />

ORGANISED BY<br />

BLS Global<br />

WEBSITE<br />

events.citizenshipinvestment.org<br />

Residency &<br />

Citizenship Conclave<br />

DATE & VENUE<br />

27-28 September <strong><strong>20</strong>19</strong> - New Delhi<br />

ORGANISED BY<br />

GMN Media<br />

WEBSITE<br />

www.citizenshipconclave.com<br />

98


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

The Global<br />

Citizen Forum<br />

DATE & VENUE<br />

10-12 October <strong><strong>20</strong>19</strong> - Yerevan<br />

ORGANISED BY<br />

Arton Capital<br />

WEBSITE<br />

www.globalcitizenforum.org/yerevan-<strong><strong>20</strong>19</strong>/<br />

Residency &<br />

Citizenship Expo<br />

@ IREIS <strong><strong>20</strong>19</strong><br />

DATE & VENUE<br />

31 October - 02 November <strong><strong>20</strong>19</strong> - Abu Dhabi<br />

ORGANISED BY<br />

Dome Exhibitions<br />

WEBSITE<br />

www.citizenshipexpo.com<br />

China Offshore<br />

Summit<br />

DATE & VENUE<br />

12-14 November <strong><strong>20</strong>19</strong> - Shanghai<br />

ORGANISED BY<br />

MX Media Group<br />

WEBSITE<br />

shanghai.chinaoffshoresummit.com.hk/en/<br />

13th Global<br />

Citizenship<br />

Conference<br />

DATE & VENUE<br />

11-13 November <strong><strong>20</strong>19</strong> - London<br />

ORGANISED BY<br />

Henley & Partners<br />

WEBSITE<br />

www.henleyglobal.com/gcc<strong><strong>20</strong>19</strong>-overview/<br />

Investment<br />

Immigration<br />

Summit Mumbai<br />

DATE & VENUE<br />

February <strong>20</strong><strong>20</strong> - Mumbai<br />

ORGANISED BY<br />

Beacon Events<br />

WEBSITE<br />

investmentimmigrationsummit.com/mumbai/<br />

IIUSA EB-5 Advocacy<br />

Conference<br />

DATE & VENUE<br />

March <strong>20</strong><strong>20</strong> - Washington<br />

ORGANISED BY<br />

IIUSA<br />

WEBSITE<br />

iiusa.org/dc<strong><strong>20</strong>19</strong>/<br />

The Investment<br />

Migration Forum<br />

DATE & VENUE<br />

01-04 June <strong>20</strong><strong>20</strong><br />

ORGANISED BY<br />

The Investment Migration Council<br />

WEBSITE<br />

investmentmigrationforum.org/<br />

99


Malta: An Investment Location for the Future<br />

Considered one of Europe’s best-kept secrets, many are still amazed to discover<br />

the plethora of benefits associated with investing and living in Malta.<br />

Situated just off the European coast beneath Sicily, the small island of<br />

Malta has established itself as a leading financial center, offering foreign<br />

investors stability, security, and innovation. The Mediterranean island has<br />

experienced above-average economic growth in recent years, as investors<br />

and travelers alike tap into the island nation’s enormous potential. During<br />

the first half of <strong>20</strong>18, Malta had the fastest growing economy in the<br />

Eurozone, boasting an economic growth rate of more than 5%.<br />

Considering this exponential growth and Malta’s incredible lifestyle<br />

benefits, an increasing number of people are looking to make greater<br />

investments in the island. Malta’s acclaimed citizenship-by-investment<br />

program offers investors the opportunity to obtain citizenship in exchange<br />

for a substantial economic contribution to the country and forge genuine<br />

links with the island.<br />

Growth of real gross domestic product (GDP) in EU<br />

member states in the 3 rd quarter <strong>20</strong>18 (compared to<br />

the same quarter of the previous year)<br />

Malta<br />

Romania<br />

Latvia<br />

Poland<br />

Slovenia<br />

Hungary<br />

Greece<br />

Ireland<br />

Cyprus<br />

Denmark<br />

Bulgaria<br />

United Kingdom<br />

1.0%<br />

0.9%<br />

0.8%<br />

0.7%<br />

0.7%<br />

0.6%<br />

1.3%<br />

1.3%<br />

1.7%<br />

1.7%<br />

1.9%<br />

3.6%<br />

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0%<br />

Citizenship-by-investment<br />

gold standard<br />

Developed by the Government of Malta in partnership with<br />

Henley & Partners, the Malta Individual Investor Program (MIIP) is<br />

considered the most successful and credible citizenship program in<br />

the world. The minimum capital contribution for a single applicant is<br />

approximately EUR 1 million, which consists of a donation to the country’s<br />

development fund, a real estate purchase or rental, and an investment in<br />

government-approved financial instruments.<br />

The MIIP has set the industry benchmark in terms of application processing,<br />

applying the world’s strictest due diligence standards and vetting of<br />

applicants. Each applicant and their included family members have to<br />

pass a strict four-tier due diligence process to ensure that all individuals<br />

entering Malta through citizenship-by-investment have no association with<br />

any criminal activities or form of corruption.<br />

Location, location, location<br />

Malta is situated in the very heart of the Mediterranean ocean yet close<br />

to the European mainland, providing a perfect bridge between a secluded<br />

lifestyle and international access. Residents of Malta can enjoy the island<br />

lifestyle, surrounded by spectacular natural beauty, while still being within<br />

close reach of top business destinations.<br />

The Maltese passport provides visa-free or visa-on-arrival access to over<br />

180 destinations worldwide, including Australia, the USA, the UAE, Hong<br />

Kong, Japan, and all the countries in Europe’s Schengen Area. As a full<br />

member of the EU, the country also enables settlement in any other EU<br />

member state.<br />

With its strategic location, this small island nation has also established itself<br />

as an important shipping hub, granting easy access to Eastern and Western<br />

Mediterranean ports. Malta also boasts excellent flight connections and<br />

has a number of direct daily flights to Europe and North Africa. London<br />

is a short three-hour flight away, while the business hub of Dubai can be<br />

accessed in five hours.<br />

Source: https://www.statista.com/statistics/263008/gdp-growth-in-eucountries-compared-to-same-quarter-previous-year/


Mediterranean lifestyle<br />

Malta is often referred to as an open-air museum and has a history that<br />

dates to 5,000 BCE — the island’s skyline is dominated by 16 th -century<br />

architecture. The country is home to three UNESCO World Heritage<br />

Sites. Among them, its capital Valletta donned the illustrious crown of<br />

‘European Capital of Culture’ in <strong>20</strong>18.<br />

Along with its rich history, Malta offers 300 days of sunshine, sea-sculpted<br />

shores, and azure waters. The island’s lifestyle is modern and welcoming,<br />

and the influences of its location are evident in local food. Dishes feature<br />

a mix of Mediterranean cuisine with strong influences from Italy, created<br />

from fresh ingredients from the local land and sea.<br />

A secure haven for your family<br />

An EU member since <strong>20</strong>04, Malta provides its residents with the same<br />

benefits afforded to European citizens, such as access to the world’s best<br />

educational and medical facilities and security under the protection of the<br />

region’s strong legal system.<br />

Malta is considered one of the safest countries in terms of natural disasters<br />

and crime. According to the <strong>20</strong>18 edition of the World Risk Report, the<br />

island nation ranks as the second safest in the world behind Qatar on the<br />

172-nation ranking of disaster risks. The crime rate on the island is also<br />

almost non-existent.<br />

The country has earned a reputation for being highly family-oriented —<br />

many of its public places and establishments are welcoming of and cater<br />

for children. Malta has excellent local and international public and private<br />

education, with all schools teaching in English. The standard of health care<br />

in Malta is among the highest in the world, with a wide network of clinics<br />

and the renowned private Saint James Hospital servicing residents.<br />

Thriving real estate industry<br />

Malta’s real estate market has shown outstanding resilience during the<br />

<strong>20</strong>08 global recession and continues to grow in sales. The purchase of real<br />

estate on the island archipelago is at an all-time high. During the first half<br />

of <strong>20</strong>18, property prices in Malta increased more than any other country<br />

in the world.<br />

The increasing number of buyers looking to purchase real estate in Malta<br />

is driven by various factors, including the opening of branches of some of<br />

the world’s most influential financial institutions, online businesses, and<br />

reinsurance companies. Malta offers an abundance of property options,<br />

including apartments, maisonettes, ‘houses of character’, palazzos, villas,<br />

and bungalows.<br />

An attractive place for business<br />

A flexible and highly trained multilingual workforce is one of Malta’s<br />

main assets and helps to ensure the country’s competitive edge through<br />

high-quality production at costs that are highly competitive in relation to<br />

the rest of Europe. Investors operating in Malta also benefit from easy<br />

access to European and Middle Eastern markets and the EU’s free trade<br />

agreements. Further bolstering Malta’s business appeal is its membership<br />

to the World Bank, the International Monetary Fund, the World Trade<br />

Organization, and the International Labour Organization.<br />

The Maltese government understands that a healthy private sector and<br />

an overall pro-investment climate contributes to the country’s sustainable<br />

development. To this extent, Malta Enterprise was created with an<br />

objective to support private businesses operating in the country, and its<br />

services are priceless to new investors entering the market. It provides<br />

assistance in data analysis, helps with identifying potential partners and<br />

clients, and guides investors through the legal system.<br />

Future-facing investment destination<br />

In <strong>20</strong>18, Malta became the first country in the world to establish a<br />

regulatory framework for blockchain technology. The island nation has<br />

also long been a front runner in the iGaming and fintech industries.<br />

The country’s online gaming industry has shown impressive growth over<br />

the past few years, supporting local employment and bolstering revenue for<br />

the island. The sector accounts for a substantial part of Malta’s economy,<br />

contributing over 12% of the country’s overall GDP.<br />

The global leader in<br />

investment migration<br />

Henley & Partners is the global leader in residence and citizenship planning.<br />

Our highly qualified professionals work together as one team in over 30<br />

offices worldwide. With a local office in Malta, our experienced global<br />

team is best-placed to guide you through your citizenship-by-investment<br />

journey.<br />

The firm also runs a leading government advisory practice that has<br />

raised more than USD 8 billion in foreign direct investment. Trusted by<br />

governments, the firm has been involved in strategic consulting and in the<br />

design, setup, and operation of the world’s most successful residence and<br />

citizenship programs.<br />

For more information on acquiring alternative residence or citizenship, call<br />

+356 2138 7400, e-mail malta@henleyglobal.com, or visit henleyglobal.com


<strong>IM</strong> INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

WHO’S<br />

WHO<br />

<strong>IM</strong> <strong>Yearbook</strong> connects you<br />

with the industry’s major<br />

firms, executives and<br />

professional advisers.<br />

102


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

Advisory & Legal<br />

ANZ Migrate...................................................................................................................................104<br />

BEYOND Residence & Citizenship.........................................................................................104<br />

Deloitte.............................................................................................................................................. 105<br />

Deloitte LLP..................................................................................................................................... 105<br />

Energopiisi S.A...............................................................................................................................106<br />

Fidesco Trust Corporation.........................................................................................................106<br />

Fragomen LLP................................................................................................................................ 107<br />

GANADO Advocates.................................................................................................................... 107<br />

Global Information Consulting Group (GICG)................................................................... 107<br />

HAZELALLEYNE Law Office................................................................................................... 107<br />

Henley & Partners.........................................................................................................................108<br />

Integritas Group.............................................................................................................................108<br />

Klasko Immigration Law Partners...........................................................................................108<br />

L Papaphilippou & Co LLC - Advocates & Legal Consultants........................................109<br />

La Vida..............................................................................................................................................109<br />

PassPro Immigration Services...................................................................................................109<br />

Rosemont International...............................................................................................................110<br />

Rostova Westerman Law Group, PA.........................................................................................110<br />

RSM Malta........................................................................................................................................110<br />

Vanuatu Investment Migration Bureau....................................................................................111<br />

Visas Consulting Group................................................................................................................111<br />

Industry & Professional Association<br />

Investment Migration Council..................................................................................................108<br />

KYC & Due Diligence<br />

BDO USA, LLC...............................................................................................................................104<br />

Exiger.................................................................................................................................................106<br />

Globe Detective Agency (P) Limited....................................................................................... 107<br />

Refinitiv..............................................................................................................................................110<br />

S-RM Intelligence and Risk Consulting Limited.................................................................110<br />

Sterling Diligence............................................................................................................................111<br />

Logistics Services<br />

DHL....................................................................................................................................................106<br />

Marketing & Promotion<br />

CiviQuo Limited............................................................................................................................ 105<br />

Media<br />

CountryProfiler Malta.................................................................................................................. 105<br />

Investment Migration Insider....................................................................................................108<br />

Programme Agency<br />

Citizenship by Investment Unit, Antigua & Barbuda........................................................104<br />

Citizenship by Investment Unit, Government of St. Kitts and Nevis............................104<br />

Citizenship by Investment Unit, Saint Lucia........................................................................ 105<br />

Dominica's Citizenship by Investment Programme...........................................................106<br />

Malta Individual Investor Programme Agency (MIIPA)...................................................109<br />

Malta Residency Visa Agency...................................................................................................109<br />

103


<strong>IM</strong><br />

INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

JAMES ALAN HALL<br />

MANAGING DIRECTOR<br />

ANZ MIGRATE<br />

ANZ Migrate, based in Singapore since <strong>20</strong>03 provides immigration services to<br />

Australia and New Zealand. We support clients throughout Asia and around the<br />

world. We work with premier partners offering solutions for business development,<br />

property development, residential real estate, commercial real estate, managed<br />

funds and investment opportunities. We are owned and managed by a Registered<br />

Migration Agent for Australia (0428740) and Licensed Immigration Adviser for<br />

New Zealand (<strong>20</strong>0800600). Our team speaks English, Mandarin, Cantonese,<br />

Bahasa Indonesia, Vietnamese, Burmese, Tagalaog and Khmer.<br />

1 North Bridge Road #23-07,<br />

179094 - Singapore<br />

T:(+65) 6100 2878<br />

E: info@anzmigrate.com<br />

W: www.anzmigrate.com<br />

Contact: James Alan Hall<br />

- Registered Migration Agent<br />

LAURA AUSTIN<br />

HEAD OF INVESTMENT<br />

MIGRATION DUE DILIGENCE<br />

BDO USA, LLC<br />

BDO delivers advisory services around the globe, and the Investigative Due<br />

Diligence Practice draws on deep experience to uncover risk and provide critical<br />

intelligence from our 1,500+ global offices in over 160 countries. We understand<br />

the need for the highest quality due diligence, conducted by our experienced<br />

investigators and expansive global network of resources. We also offer a<br />

proprietary monitoring solution, eConnaissance®, which is the first of its kind<br />

in the Investment Migration (<strong>IM</strong>) industry. BDO is a corporate member of the<br />

<strong>IM</strong>C and is actively committed to supporting <strong>IM</strong> programmes and their ability<br />

to positively influence the global community. With our international presence,<br />

outstanding reputation, industry expertise, knowledge of best practices, and<br />

advanced technology, BDO is unmatched in the <strong>IM</strong> industry as a leading provider<br />

of due diligence and monitoring services.<br />

100 Park Avenue, New York, NY 10017- USA<br />

T:(+1) 212 885 7493<br />

E: laustin@bdo.com<br />

W: www.bdo.com<br />

Contact: Laura Austin<br />

- Head of Investment Migration Due Diligence<br />

HAKAN CORTELEK<br />

CHIEF EXECUTIVE OFFICER<br />

BEYOND RESIDENCE & CITIZENSHIP<br />

BEYOND Residence & Citizenship houses leading specialists in the Immigrationby-Investment<br />

field. BEYOND’s seasoned, globally minded and locally connected<br />

professionals united in London over a decade ago to provide seamless service<br />

and successful outcomes for their clients. BEYOND offers multi-jurisdictional<br />

solutions worldwide with its extensive partnership networks. The team also<br />

engages in government advisory, education consultancy, international real estate<br />

and due diligence services. Leveraging core operations in Dubai, Hong Kong,<br />

London, Istanbul and Kiev, BEYOND has had extensive experience serving clients<br />

from Russia, China, Turkey, West Africa, the Middle East, South-East Asia and<br />

the Americas. By comprising the most globally aware and experienced team,<br />

BEYOND’s platform effectively serves direct clients and intermediaries in all<br />

Residency- and Citizenship-by-Investment programmes.<br />

Dubai - United Arab Emirates<br />

T:(+97) 150 691 8860<br />

E: hakan.cortelek@beyond-immigration.com<br />

W: www.beyond-immigration.com<br />

Contact: Hakan Cortelek<br />

- Chief Executive Officer<br />

CHARMAINE DONOVAN<br />

CHIEF EXECUTIVE OFFICER<br />

CITIZENSHIP BY INVESTMENT UNIT, ANTIGUA & BARBUDA<br />

The Antigua and Barbuda Citizenship by Investment Unit (CIU), is managed<br />

by a team of professionals and is responsible for processing all Citizenship<br />

by Investment applications, issuing Agent Licenses, approving Authorized<br />

Representatives, Projects and Business Investments. The ultimate responsibility<br />

of the CIP rests with the Office of the Prime Minister. www.cip.gov.ag<br />

Pavilion Drive, Coolidge, St. George’s - Antigua<br />

T:(+1) 268 481-8400<br />

E: info@cip.gov.ag<br />

W: www.cip.gov.ag<br />

Contact: Charmaine Donovan<br />

-Chief Executive Officer<br />

LES KHAN<br />

CHIEF EXECUTIVE OFFICER<br />

CITIZENSHIP BY INVESTMENT UNIT, GOVERNMENT OF ST. KITTS AND NEVIS<br />

Les Khan, PMP, MSOC, BBA, is Chief Executive Officer of the St. Kitts and Nevis<br />

Citizenship Investment Unit. He has over <strong>20</strong> years of experience with large<br />

financial organizations and risk management companies globally. Mr. Khan has<br />

been intimately involved in the revamping of the Citizenship by Investment Unit<br />

in St. Kitts and Nevis, and is an expert on citizenship programmes within the<br />

Caribbean. Mr. Khan has also led initiatives to automate the CBI programmes and<br />

has been instrumental in leading regional conferences, bringing representatives<br />

from the various regional CIU’s together with representatives from the US, UK,<br />

Canada, EU and the <strong>IM</strong>F.<br />

The Citizenship by Investment Unit, 1st Floor,<br />

Ministry of Finance Building, P.O. Box 597,<br />

Golden Rock - St. Kitts, West Indies<br />

T:(+1) 869 467 1474<br />

E: ciuunitskn@gmail.com<br />

W: www.ciu.gov.kn<br />

Contact: Les Khan - Chief Executive Officer<br />

104


INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

<strong>IM</strong><br />

NESTOR ALFRED<br />

CHIEF EXECUTIVE OFFICER<br />

CITIZENSHIP BY INVESTMENT UNIT, SAINT LUCIA<br />

As the youngest Citizenship by Investment Programme (CIP) in the Eastern<br />

Caribbean, the vibrant island of Saint Lucia is committed to offering unique<br />

benefits with unmatched respect and integrity. Inheriting decades of knowledge<br />

and experience from our Caribbean neighbours, Saint Lucia has the privilege<br />

to employ the best industry standards and offer competitive advantages to our<br />

investors. Highly reputed for its ideal climate and quality of life, the investment<br />

programme to become a citizen of Saint Lucia is among the most attractive in<br />

the industry, offering a brighter future through our simple yet highly efficient and<br />

optimised application process.<br />

5th Floor, Francis Compton Building<br />

Waterfront, Castries, LC04 301 - Saint Lucia<br />

T:(+1) 758 458 6050<br />

E: info@cipsaintlucia.com<br />

W: www.cipsaintlucia.com<br />

Contact: Nestor Alfred<br />

- Chief Executive Officer<br />

YAKOF AGIUS<br />

FOUNDER &<br />

CHIEF EXECUTIVE OFFICER<br />

CIVIQUO L<strong>IM</strong>ITED<br />

CiviQuo is the world’s first residency and citizenship by investment e-marketplace.<br />

The platform brings together a large selection of programmes, licensed agents<br />

and intermediaries from around the world, enabling each to showcase their<br />

offering in a very simple, transparent and straightforward manner. Individuals<br />

interested in RCBI programmes do not need to browse through many different<br />

sites to find relevant information but can use CiviQuo as a resource to find<br />

information on programmes and service providers. A key feature of CiviQuo is that<br />

service providers who feature on the website need to disclose the professional<br />

fees they will be charging. Once clients have filed their RCBI application, they can<br />

also rate the service provider used. CiviQuo brings a new transparent formula<br />

that eases the process for individuals and transforms the way agents market<br />

themselves.<br />

Aragon House, Level 1, Dragonara Road,<br />

St. Julians, STJ 3140 - Malta<br />

T:(+356) <strong>20</strong>34 1608<br />

E: info@civiquo.com<br />

W: www.CiviQuo.com<br />

Contact: Yakof Agius<br />

- Founder & Chief Executive Officer<br />

GARVAN KEATING<br />

CHIEF EXECUTIVE OFFICER<br />

COUNTRYPROFILER MALTA LTD<br />

CountryProfiler (CP) is an international media company that specialises<br />

in the publication of country reports and investment guides on the world’s<br />

most innovative and high growth markets for trade, foreign investment and<br />

international financial services. CountryProfiler publications provide blue<br />

chip companies, their executive management and professional advisors with<br />

global business intelligence and market insight they require when managing<br />

cross border operations, investing or doing business with new markets.<br />

CountryProfiler’s publications are considered to be among the most prestigious<br />

economic intelligence products available.<br />

64, St Anne Court, Flat 2,<br />

Bisazza Street, Sliema SLM 1642 - Malta<br />

T: +(356) <strong>20</strong>34 <strong>20</strong>34<br />

E: puglisevich@countryprofiler.com<br />

W: www.countryprofiler.com<br />

Contact: Melissa Puglisevich - Office Manager<br />

JURGA MCCLUSKEY<br />

PARTNER, HEAD OF <strong>IM</strong>MIGRATION<br />

(EUROPE AND THE MIDDLE EAST)<br />

DELOITTE LLP<br />

Award-winning immigration expert with over fifteen years’ experience, Jurga<br />

McCluskey leads Deloitte’s UK immigration practice. Deloitte provides global<br />

immigration services to both corporate and private clients. The team comprises<br />

170 experienced professionals, and is complemented by other member firms,<br />

covering over 151 countries, making Deloitte one of the largest immigration<br />

providers globally. Recommended advisor, Anthony Michael leads Deloitte’s<br />

Private Client immigration practice, which serves high-net-worth individuals and<br />

private businesses with their global immigration strategy. Anthony is assisted<br />

by Kathryn Crane who is an Associate Director in the team. The team provide<br />

dedicated end to end support for short term and long term visas, residence<br />

permits, permanent residence and citizenship applications.<br />

2 New Street Square, London,<br />

EC4A 3BZ - United Kingdom<br />

T:(+44) <strong>20</strong> 7007 7668<br />

E: jmccluskey@deloitte.co.uk<br />

W: www.deloitte.co.uk<br />

Contact: Jurga McCluskey - Partner, Head of<br />

Immigration (Europe and the Middle East)<br />

CHRIS CURMI<br />

DIRECTOR<br />

DELOITTE<br />

Deloitte Malta provides a market leading immigration service. Headed by UK<br />

Chartered Accountant Chris Curmi and former senior diplomat Jonathan Galea<br />

Deloitte’s dedicated multilingual immigration team offers an unparalleled level<br />

of experience and competence in representing clients in Malta. Deloitte Malta is<br />

not only a successful immigration practice in one of Europe’s most successful<br />

economies, with almost 500 professional staff it is a distinguished provider of<br />

audit, tax, consulting, financial and risk advisory services to an extensive array of<br />

international private and corporate clients.<br />

Deloitte Place, Mriehel Bypass,<br />

Mriehel BKR3000 - Malta<br />

T:(+356) 2343 <strong>20</strong>00<br />

E: ccurmi@deloitte.com.mt<br />

W: www.deloitte.com/mt<br />

Contact: Chris Curmi - Director<br />

105


<strong>IM</strong><br />

INVESTMENT MIGRATION YEARBOOK <strong><strong>20</strong>19</strong>/<strong>20</strong><strong>20</strong><br />

CHARLES SCHIAVONE<br />

COUNTRY MANAGER<br />

DHL<br />

DHL is the global market leader in the industry and “The Logistics Company for<br />

the World”. Our popular International Express door-to-door delivery service is<br />

available when you’re sending document or non-document shipments anywhere<br />

around the world. DHL Express remains a pioneer, constantly providing new<br />

solutions for its customers, solutions that make it the market leader. While<br />

maintaining the largest market share, DHL sets very high levels of service and<br />

always seeks to serve the customer in the best possible way. Having a constant<br />