Visas and Citizenships for Chinese in Europe and foreign Countries

Visas or citizenships for Chinese people in Europe or other parts of the world are issues which we are often faced with in our consulting business. Therefore, we want to share an article with our readers which reflects the current situation very well.   

China’s richest people are looking to leave the country and settle abroad

In January 1857 a commotion was reported along the foreshore at Robe in South Australia. “A ship actually coming into Guichen Bay and crowded with passengers!!” was the written record of Thomas Smeaton, the town’s bank manager of the time. On the vessel: “Chinese, all men, with moon faces and all with pigtails, all alike and indistinguishable.”

Robe didn’t welcome many passenger ships. But in a bid to discourage Chinese migrants from trying their luck in the Victorian gold rush, officials in the neighbouring state were levying an arrival tax on newcomers that was more than the cost of the 35-day voyage from Hong Kong.

So in a ruse to avoid the levy, the immigrants were dropped off at Robe instead, and then trudged more than 250 miles to the gold prospects in Bendigo and Ballarat across the state border.

Today’s Chinese migrants are being promised faster-track access to Australian residency rights. And although not quite the red carpet treatment, the offer is being made to a different breed of migrant. Less for those hoping to make their fortunes, the plan is to give China’s wealthy a chance to invest their fortunes in Australia.

Other countries are trying the same pitch, part of a wider trend to lure a new Chinese emigrant population. Fed up with toxic smogs, poisoned rivers and contaminated food, many of China’s most affluent say they want to settle abroad. With the wealth they have to invest, developed world countries are competing to attract them.

What investor visas are available?

A number of governments are offering non-nationals the right to live and work in their respective countries, as long as they are prepared to invest a specified amount. In most schemes the bait is permanent residency status, which will be approved after a given period of time.

Residency is an ideal option for most Chinese nationals because dual citizenship is illegal under Chinese law. Permanent residence is best of all, allowing businesspeople to retain citizenship without impinging their rights to run their businesses back at home.

The visa programmes can be split into two main groups. In one camp are the property-focused plans, mostly being offered in Europe. Residency papers are available for anyone wanting to invest €400,000 ($518,577) in Portuguese property, for instance, while the Irish will grant visas for all those willing to spend €500,000. The Cypriot authorities will do the same for purchases above €300,000, and Spain, suffering from one of the worst property slumps in Europe, is mulling over whether to offer the cheapest deal of all – residency rights in exchange for a home purchase of just E160,000.

That makes some of the schemes look like property fire sales with a visa thrown in. And the optimistically named Winner Xing, president of Worldway Group, a visa agency in Hong Kong, predicts that more European governments will be lowering their thresholds for visas this year. Look back on 2013 and it will be remembered as “the Year of Emigration to Europe”, Xing told the Southern Metropolis Daily.

Reports from places like Paphos in Cyprus suggest that some realtors are already dependent on Chinese business. The Guardian, a UK newspaper, suggested in February that this year will be the worst ever for property purchases on the island, with January’s figures already showing a 53% drop on the year before. But hundreds of buyers from China have been one of the few bright spots for the sector and there’s speculation that Chinese developers are lining up to build houses on the island.

Other countries are taking a different tack: offering visas to those who funnel their cash into local businesses and investment projects. The UK and Singapore have offerings with investment thresholds of £1 million ($1.49 million) and S$1 million ($801, 218) respectively. New Zealand has two schemes, one with a language test requirement that calls for NZ$1.5 million ($1.2 million) of investment, the other with no English language test but requiring NZ$10 million of capital. The United States EB-5 programme offers 10,000 visas a year to those investing at least $1 million in a new business or $500,000 into businesses in high-unemployment areas. The investment must generate at least 10 full-time jobs for US workers within two years.

In Australia, purchases of property don’t even count towards residency status under the Significant Investor Visa (SIV) scheme, which was launched last November, says Jack Hoysted, an executive at Stirling Henry, a corporate immigration firm based in Sydney.

Hoysted told WiC that the prize for the Chinese is still residency status. But to get it, they have to invest in Australia-based private companies, state or government debt, or managed funds that invest in local assets.

Rather than propping up its real estate sector, Canberra’s policy goals are business creation and employment, as well as deeper trade ties with the Chinese. “It’s another way for Australia to hook up to the China growth story,” Hoysted suggests.

The programme has no age limit for applicants, no requirement to complete an English language test and, importantly, family members qualify to apply for residency too. But even so, with A$5 million as the minimum investment it looks much more expensive than the alternatives in Europe.

“Those markets are in the doldrums,” Hoysted counters. “With Australia you are buying into a much stronger prospect. You’re getting a legal system that you can be sure about and a stable political outlook. And there’s the chance of permanent residency, which means access to full healthcare and education benefits. Pretty much everything except the vote, in fact.”

So it’s the Chinese being targeted?

Technically, the visa offers apply to all nationalities. But there’s more than a hint that the Chinese are high on the list of potential applicants. Partly that’s a function of the greater number of wealthy Chinese likely to be interested in schemes of this type. But the host countries are also making an effort to reach out to them. In Paphos, for instance, there have been carnivals with a Chinese flavour to bring in more business. The Australians are taking a different approach, appealing to the tried-and-tested numerological instincts of the Chinese. “Is it any great coincidence that the permanent visa scheme is numbered with a sub-class of ‘888’?” Hoysted asks [eight is an auspicious number for the Chinese, denoting wealth]. “Someone in the government clearly wants to send a message.”

In Australia, the Chinese have featured strongly in earlier investment visa schemes, accounting for about 60% of the total. It’s a similar story in Canada, where the Chinese have accounted for 75% of investment immigration in the past three years. In the United States, still the top destination for Chinese immigrants overall, 3,340 visas were granted via investment programmes in 2011.

Why do the Chinese want to apply?

In the relevant surveys, the most frequent response is that they want better education for their children, cleaner air for their families to breathe, and safer food to eat.

But the suspicion is that many of the emigrants aren’t being completely forthcoming about their motivations for moving. Often it’s a case of wanting to send their financial assets offshore, and not just their holiday luggage.

Clearly, the lifestyle in places like New Zealand, Australia and Canada does appeal. But so does the predictability of the legal system in their new abodes, giving Chinese the confidence that any assets that they transfer cross-border will be safely held. It goes without saying that many of those applying for residency overseas are high net worth individuals, a pattern also being noted in the Chinese media. Last month, the Annual Report on Chinese International Migration made headlines. Jointly issued by the Centre for China & Globalisation and the Beijing Institute of Technology School of Law, the report surveyed Chinese with personal assets of over Rmb100 million ($16 million). Its finding: 27% had already obtained foreign residency, and 47% were considering it.

The flip side of the trend is that the Chinese authorities have grown uneasy with the associated capital outflow. Wang Huiyao, one of the editors of the International Migration report, said that Chinese citizens getting permanent residence overseas in the last three years took at least $15 billion out of China with them.

“The private economy contributes more than 60% of China’s GDP and it absorbs a majority of employees. So if private business owners emigrate with their capital, it would mean less investment in the domestic market, so fewer jobs would be created,” Wang told the China Daily.

Of course, in theory Chinese law limits foreign currency exports to an annual limit of $50,000 per person. Companies are also supposed to exchange currency only for business purposes, such as paying for imports or making investments approved by the authorities. This raises questions about how would-be visa investors get their money out of China, as well as providing further evidence of the porous nature of some of the economy’s much-vaunted capital controls.

Other grey areas will need to be addressed too, including stipulations that investors must be able to prove that their wealth was legally acquired. How that is going to be policed is also unclear.

“At this stage, the firms looking to facilitate the investor visa programme aren’t concerning themselves directly with the specifics of how the investment arrives in Australia,” Hoysted admits. “But capital seems be able to find its way across Chinese borders readily enough. The casinos in Macau are evidence of this.”

London calling?

Property firms are already alive to the potential of the emigration wave. Global Entrepreneur reports that UK developer Barratt set up an office in Beijing last year – with Chinese buyers contributing 7% to its 2012 sales. According to the magazine “Barratt is planning to sell more British houses to Chinese.”

The Berkeley Group began to target the Chinese market in 2010 and so far has sold 700 London units to Chinese buyers.

China Business Times says similar trends can be seen in the US. It interviewed an executive from Sotheby’s American real estate practice: “Three years ago about 12% of my clients were Chinese. This ratio was 20% last year. Now about a third of my clients are from China.” According to a Sotheby’s survey, 43% of purchasers stated that immigration was the purpose behind buying.

Despite the visa offer, there are some mixed messages?

There was the story about the arrest of Gao Ping, a leading Chinese businessman in Madrid, on allegations of racketeering. The incident sparked a raft of Sinophobic comments in the Spanish press. Gao has since been bailed, and 20 Chinese nationals arrested with him have begun legal proceedings against the Spanish authorities. But the detentions sat uneasily with talk of attracting Chinese capital into Spain, earning caustic comment in China’s own media.

“This may look like a free lunch but common sense tells us nothing is ever free and this is no exception,” the Guangzhou Daily warned when Spain’s mooted visa scheme grabbed headlines last November. “We need to be clear that the Spanish government is introducing the so-called ‘cash for citizenship’ policy with the core objective of sucking up foreign gold.”

Do the host countries expect a flood of Chinese arrivals?

Reuters estimates that there are a million empty properties in Spain. So, in theory, that could lead to a major surge in new Chinese residents, should they snap up the empty units.

But in most of the visa schemes, the hope is for a flow of capital from China, rather than people. They are all operating with relatively small numbers of migrants, either in terms of quota or in the number of final applications. The Australian authorities have allocated just 700 spots for the Significant Investor Visa this year, for instance, and only two applications have been received to date. Even when an investor visa is granted, the assumption is often that the Chinese recipient won’t choose to live permanently in the new country of residence. Instead, residency status looks like serving as more of a backstop or bolt hole if things get rough. Until then, the visa-holders are likely to stay in China, working in the businesses that have made them wealthy enough to consider an alternative life elsewhere.

The host countries know that too, which is why they have made the minimum stay periods for their new residents as limited as possible. Investors in Portugal need to visit for just seven days in the first year, and 14 days in each subsequent two-year period. Requirements in Cyprus are even less onerous at only a single visit in the first year, and then a week’s stay in every subsequent two-year period.

Beneficiaries of the investor visa in Australia are required to stay for a little longer, for 40 days in each of the initial four years before permanent residency becomes an option. But that is significantly lower than the minimum periods in former residency schemes.

Meanwhile speculation abounds in China itself as to how many Chinese might seek to emigrate in the coming years. China Business Times reckons the number of families with the financial means is around 2.7 million – the demographic with a net worth of over $1 million.

Paradoxically, China’s richest man has made resolutely clear he’s not going anywhere. Wahaha boss Zong Qinghou told China Daily last week: “I will not emigrate to any other country because I am not familiar with any foreign language and not used to foreign food. I have my business in China and live a good life.”

Henning SchwarzkopfRead all author posts

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