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IM INVESTMENT MIGRATION

YEARBOOK 2019/2020

Navigating towards Next-Generation Transparency Deep Dive Due Diligence Delivers Level III Security to the Industry

Rollout of First Global Industry Qualifications Finally Begins Global Standards: A game-changing moment just got closer

Who’s Who: CEOs and political leaders share essential insights on the industry landscape

An Unseen Force for Good 2nd Edition

Under the Waterline:

Billions of Dollars Flow into Infrastructure Investment What’s Hot & What’s Not: The trends, events and developments influencing Investment Migration

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INVESTMENT MIGRATION YEARBOOK 2019/2020

Meet the team

IM INVESTMENT MIGRATION

YEARBOOK 2019/2020

An Unseen Force for Good

Navigating towards Next-Generation Transparency Deep Dive Due Diligence Delivers Level III Security to the Industry

keating@countryprofiler.com

2nd Edition

Rollout of First Global Industry Qualifications Finally Begins Global Standards: A game-changing moment just got closer

Garvan Keating Chief Executive Officer

Under the Waterline:

Billions of Dollars Flow into Infrastructure Investment

Who’s Who: CEOs and political leaders share essential insights on the industry landscape

What’s Hot & What’s Not: The trends, events and developments influencing Investment Migration

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INVESTMENT MIGRATION YEARBOOK 2019/2020

Contents

Facts & Figures....................................................................8 Industry Profile: A New World of Possibilities.....................................12 Putting our House in Order Bruno L’ecuyer..................................................................... 18 A Qualified Difference.................................................22 New Membership Structure for a Stronger Industry Jacqueline Gauci ................................................................23 Investment Migration: The New Normal Juerg Steffen.........................................................................24 Diversify to Grow Austin T. Fragomen............................................................28 Taxing Times: Why the OECD Didn’t Get it Right Zac Lucas.............................................................................30

What it Takes to Build an Efficient RCBI Programme Stéphane Tajick...................................................................64 Furthering the Investment Migration Industry’s Sustainability Julia Farrugia Portelli........................................................66 The World of Investment Migration: What’s New?......................................................................70 In Focus: Moldova Iulia Petuhov........................................................................72 Inside the MRVA Charles Mizzi....................................................................... 73 Cyprus Update Michalis P. Michael....................................................................74

Time for Renewal Bob Kraft...............................................................................32

3 Questions with... Jonathan Cardona.......................................................................76

Why Strategy is Everything Edward Beshara..................................................................34

How to Work Together, How to Win Together Due Diligence Roundtable................................................78

Inside China’s Migration Industry: Too Big to Be Ignored Larry Wang.........................................................................36 We Need to Enter an Era of Coopetition Martin O’Connor................................................................38 Investor Citizenship and the EU: Zooming in on the European Commission’s Ill-Informed Analysis Dimitry Kochenov............................................................. 40 Trends & Topics............................................................ 44 The Power of Transparency Yakof Agius...........................................................................54 We Need to Act Responsibly Giselle Bru............................................................................58 Regulated Consultants Keep Fraud at Bay Gerd Damitz....................................................................... 60

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Global Citizen Tax to Shift Industry Focus? Armand Arton...............................................................................63

The Real Drivers Behind Applications Sonia Spencer............................................................................... 84 Disrupting the Nation State..................................... 86 The Big Picture Idea: Nation as a Service Kaspar Korjus..................................................................... 90 Make a Real Impact Simon Anholt.................................................................................92 The Big Migration Debate: Finding the Missing Link Khalid Koser.........................................................................94 Expatland: The World’s Most Influential Country John Marcarian...................................................................95 Events...................................................................................97 Who’s Who......................................................................102


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INVESTMENT MIGRATION YEARBOOK 2019/2020

Facts & Figures The investment migration industry has experienced exponential growth in the past years. More than a dozen countries today offer citizenship-by-investment programmes. While these programmes often dominate the narrative and news of the industry, many more nations operate residence-by-investment (RBI) programmes for investors, with major global players such as the US, the UK, Canada, Australia, and New Zealand participating in this industry.

8

100

60

30

7

countries offer some form of investment migration programme

jurisdictions are actively promoting their programme

programmes are attracting the largest share of applicants

out of the G-20 members operate some form of investment migration programme


INVESTMENT MIGRATION YEARBOOK 2019/2020

30%

Only 30% of migrating high-networth individuals come into countries under investor migration programmes, New World Wealth claims. Most still come in via work transfers, citizenship by ancestry, spousal visa and family visa.

80%+

Approximate percentage of Chinese applicants to any residence programme in the world

36%

According to the 2019 Knight Frank ‘wealth report’, 36% of high net worth individuals (HNWIs) already hold a second citizenship and passport, with 26% planning to emigrate permanently.

10%

Refugees and asylum seekers constitute roughly 10% of all international migrants.

At a Glance: Countries with Popular Investment Migration Programmes

Citizenship Programmes

Residence Programmes

Antigua & Barbuda • Austria • Bulgaria Cambodia • Cyprus • Dominica • Grenada Jordan • Malta • Moldova Montenegro – upcoming St. Kitts & Nevis • St. Lucia • Turkey • Vanuatu

Anguilla • Australia • Canada • Cyprus France • Greece • Hong Kong • Ireland • Italy Jersey • Latvia • Malaysia • Malta • Monaco New Zealand • Portugal • Singapore Spain • Thailand • UAE • UK • USA

5000

550+

400+

$3 billion

estimated number of people acquiring citizenship abroad per year

Number of agents licensed across the world

Members of the Investment Migration Council, coming from over 55 different countries

Value of the citizenship-byinvestment industry

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INVESTMENT MIGRATION YEARBOOK 2019/2020

150 – 170 countries

An EU passport typically allows visa-free travel to between 150 and 170 countries

14 million

There are approximately 14 million high-net-worth individuals in the world, each with net assets of $1 million or more.

€9.2 billion

European countries benefitted from investment migration by receiving €9.2 billion during the 2008-2018 period.

2-30%

Percentage of GDP contribution of investment migration programmes in some countries

258 million

There were 258 million international migrants in 2017, representing 3.4% of global population. This number has almost tripled in the past 50 years.

12,000

1984

The year when St. Kitts and Nevis introduced the first CBI programme

108,000

About 108,000 millionaires migrated countries in 2018, according to a study by New World Wealth.

Range of minimum investment required by different CBI programmes around the world

$6.7 trillion 130%

China’s wealth has increased by 130% between 2008 and 2018, New World Wealth found out.

12,000 high-net-worth individuals migrated to Australia in 2018, beating its main rival the US for the fourth year running. The USA experienced a wealth inflow of 10,000 millionaires, followed by Canada (4,000) and Switzerland (3,000), according to New World Wealth. 10

Annual investment into US economy by EB-5 Programme

$100,000 - $2.4 million

2/3rds

Two-thirds of all international migrants were born in Asia or Europe.

$5 billion

McKinsey Global Institute (MGI) estimates that migrants contributed roughly $6.7 trillion, or 9.4 per cent, to global GDP in 2015 – some $3 trillion more than they would have produced in their origin countries. Sources: United Nations, Knight Frank 2019 Wealth Report, Stephane Tajick Consulting, Henley & Partners, European Parliament Research Service, McKinsey Global Institute, New World Wealth, CountryProfiler Research


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INVESTMENT MIGRATION YEARBOOK 2019/2020

INDUSTRY PROFILE:

A New World of

POssibilit Growth and expansion continue to be the hallmarks of the investment migration industry, triggering a drive towards higher standards and a concerted effort to future-proof the industry.

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INVESTMENT MIGRATION YEARBOOK 2019/2020

ies

T

he rapid expansion of the investment migration industry shows no sign of slowing down. Across the entire industry spectrum, every nook and cranny has been experiencing growth. New programmes have come online and even more in the offing, raising questions among industry commentators on their sustainability. Despite the question marks, the appeal to clients appears to continue unabated, along with the number of new entrants seeking to service the growing appetite for visa-free travel by the globally mobile. The exponential growth that the industry is enjoying has not gone unnoticed by major international institutions and standardsetting organisations such as the EU, the IMF and the OECD that are all expanding their interest and flexing their powers over the industry.

Redoubling Efforts

International organisations, policy-makers and the media continue to view the industry with a critical eye, though there has been a notable softening in their stance. However, the decision of the European Parliament to shutter golden visa and passport programmes sent a clear message to the industry that the concerns of policy-makers and wider society cannot be ignored. With no shortage of opposing voices to the investment migration industry, it is clear that there needs to be a redoubling of advocacy efforts to ensure that programmes are not sanctioned, or worse still, closed altogether. However, many believe the current scrutiny is necessary to drive transformational change and lead the investment migration industry into a new era. Today, almost everyone in the industry agrees that regulation and common standards need to be the next steps. Despite the headwinds that the industry is facing, many governments are seeing and witnessing the benefits that investment migration programmes can bring to their countries, whether it be attracting the best and the brightest talent via their entrepreneur and start-up schemes or the key role these programmes have played in bolstering infrastructure capacity and providing a steadying hand in times of economic uncertainty.    13

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Three Decades of Growth

The investment migration industry has grown in leaps and bounds since St. Kitts and Nevis broke new ground with the launch of the first citizenship-by-investment programme in 1984. Now 35 years on, the industry marks this major milestone with a renewed confidence, as the sector moves beyond a niche attraction for the few and goes ever more mainstream. The business model has evolved over the years and was developed further with the introduction of the golden visa concept by Portugal. A relatively new phenomenon is the emergence of start-up and entrepreneur visa programmes, with which governments seek to entice a whole new generation of global innovators. Today over 100 citizenship and visa programmes are in existence, generating billions in investments that are being mobilised to create jobs and economic activity.    Investment migration has never been far from controversy and often maligned by policy-makers, influencers and the media alike. The concept of citizenship by investment in particular still stokes resentment that programmes do little but allow the rich to buy privileged access to their countries.  Though their sentiments may be genuine, many of them may be surprised to learn that five of the G-7 members and seven of the G-20 countries have been employing some form of investment migration programme to bolster inward investment. The visa, over citizenship, programmes have long been the more acceptable face of the industry and have been used by countries such as the US, Canada and the UK to attract people, capital and know-how. A major milestone and turning point in the acceptance of citizenship and visa programmes was the decision by two EU countries, Malta and Cyprus, to introduce citizenshipby-investment programmes. Globalisation has been a good travel companion for the investment migration industry. The global citizen who wants access to the world for business and leisure has become a reality that is driving demand for investment migration products, which are becoming ever more refined and diverse.   Big Impact

It is estimated that investment migration accounts for $2 billion annually, industry, but it brings in tens of billions in investment. In terms of economic impact, programmes represent anything between 2% and  as high as 30% of GDP in some countries, and can be a defining factor between an economic surplus and a deficit. Across the world  investment migration  programmes have been the catalyst for major infrastructural improvements, including resorts, harbours, airports, hospitals, office buildings and luxury residential developments, which in turn have had a massive multiplier effect on the respective economies. These programmes are not only influential in delivering cutting-edge infrastructure, investments into companies, startups and R&D programmes; they are also having

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the effect of generating whole new economic sectors that did not exist before their introduction.  Governments increasingly like the idea of raising non-debt bearing capital  to diversify their economies at a relatively low cost. But while these programmes present a golden opportunity for many countries, governments equally need to be stringent in ensuring the windfall they are enjoying today is directed exclusively towards productive investments that will pay dividends in the future and not be tempted to finance day-to-day expenses, which could expose their economies to unintended risks.   Two Tiers

As investment migration programmes evolve and develop further, the distinguishing factors between programmes will be about service, professionalism and the impact of the investment. Some 60 countries are actively promoting their programmes, with 30 of them being the most relevant and attracting the largest share of applicants. Countries such as the US, Canada, Australia, and the UK have cemented their position as preferred destinations for people with a desire to relocate, attracting wealthy migrants from all corners of the world. However, the expectation is that access to these tier-1 countries will become more exclusive. Programmes are widely expected to go up in price, which is reflective of their premium status. Beyond the most desirable places in the

Now 35 years on, the industry marks this major milestone with a renewed confidence as the sector moves beyond a niche attraction for the few and goes evermore mainstream.


INVESTMENT MIGRATION YEARBOOK 2019/2020

world to live in, more and more programmes are coming online to compete and attract global citizens. Turkey, Jordan, Moldova and soon Montenegro are the latest entrants to the market and will follow a long list of rivals, which include Caribbean and European countries. With an estimated 5,000 applicants for citizenship-by-investment programmes and further tens of thousands acquiring golden visas globally, the question on everyone’s mind is if there is too much product for the market or if the emergence of new players will fuel further demand. On this question the jury is still out. The Big China Question

China remains the dominant market for the entire industry. While China is a great source market, accounting for roughly 80% of applications to any residence programme, from a business and industry-risk point of view, there is very much an over-reliance on one market. To ensure the sustainability of the business model, both programmes and agents are waking up to this problem, and a most notable trend in more recent years has been the increase in business coming from new markets such as India, Vietnam, Russia and South Africa. The recent price drop some programmes have experienced also means acquiring a second passport has become increasingly affordable for people of more modest means. This development might further widen the already existing divide between top tier and second tier programmes. While the strategy of the tier-1 programmes will increasingly revolve around ultra-high-net-worth individuals with at least $30 million, the lower cost and more accessible programmes might appeal to high-networth and mass affluent clients with $1 million to $10 million of investable wealth. The major task for the industry and programmes going forward will be to find the balance between the needs of the country and meeting the expectations of the applicants. Up to now property investments of one kind or another have featured prominently in all programme offerings; however, agents report that to a large degree acquiring property is the least preferred

route for client investment. Property investment will always hold an appeal, but it will be on a more equal footing with other asset classes and investment options. There are already alternatives in the market that are resonating with wealthy clients, including investing in a property fund as opposed to purchasing property, and loan provision as opposed to equity investment. A New Approach

Governments have to go beyond their current vanilla-type offering and ensure investments are being directed to where they can be most productive for the country, its citizens and, ultimately, the client. Countries should look at allowing citizenship or residence applicants to invest on a portfolio basis, whereby part of their investment can be in equities, bonds, property, loan funds, philanthropic causes, listed entities, private enterprises, start-ups and angel investment funds, which combined can provide more impact and encourage a wider array of economic activity. This also opens agents to the opportunity of offering a whole host of value-added services to their clients. The industry will also need to have millennials in its sights. With 23% of the world’s millionaires being millennials, this clientele has its own expectations of what they want and how they want to be serviced. Millennials in particular are showing a greater interest in impact investing and what positive effect their contribution is having on their host countries. The industry not only has an important role to play in distributing capital where it can be best utilised for society’s good, it can also help countries gain an outsized influence. Investment migration offers a significant opportunity for countries to expand the concepts of residence and citizenship, and novel proposals for what could be best described as ‘nation as a service’ have already surfaced. While some say this is ‘utopian thinking’, Estonia, with its e-residency programme, is providing a first glance at what the future might look like. This concept could actually see countries develop into service and product platforms for fee-paying ‘citizens’, who can subscribe or unsubscribe to their offering. 15

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INVESTMENT MIGRATION YEARBOOK 2019/2020

More Competition

The industry landscape remains very fragmented and ripe for consolidation. Outside of the odd whale in China, a few major players have emerged, including Henley & Partners, Arton Capital, CS Global, Kylin Prime, Apex and legal firm Fragomen, which are followed by a large number of smaller firms. Increasing competition and a need to scale up may well see the first wave of mergers and acquisitions occurring sooner rather than later. Conversely, the industry could be open to expansion and see more players coming into the space, beyond the boutique advisory firms that have been in place for many years. In the same way as investment migration consultancies are starting to offer complementary services, such as private banking, wealth and asset management, to their clients, traditional advisory firms could add investment migration as a product. Global Standards

The decision by the European Parliament to strongly recommend the phasing out of visa and passport programmes sent a crystal clear message that the investment migration model will have to evolve materially to avoid a broad political and social backlash. Fears of a potential increase in security threats and low consumer protection standards reverberate across the entire industry. Questions on transparency and adherence to international standards on anti-money laundering and compliance regulations brought the sector into the sharp focus of other countries and international organisations such as the EU, the IMF and the OECD which have demanded tighter  controls across the industry and tighter background checks on applicants.  This means setting common standards for golden visas and citizenship programmes is now a must. The industry more than ever needs to recognise the need to either self-regulate or accept that rules will be imposed on it. The regulation of agents and the development of effective consumer protection measures are being viewed as important steps towards improving the sector’s reputation. The investment migration industry currently remains largely unregulated, with only a handful of countries having established an independent regulator to oversee the operation of their programmes. Huge regulatory pressures emanating from the EU and G20-initiatives on anti-money laundering and anti-terror legislation are requiring the industry to embark on a major overhaul of its customer due diligence to comply with new global standards. Educating an Industry

With the introduction of certification by the Investment Migration Council, 2019 will also go down as the year in which professional educational programmes geared towards the investment migration industry have been launched. This will help demonstrate that both programmes and agents are a step closer to reach-

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ing the much-needed high standards demanded by governments, policy-makers and the general public. As the industry becomes increasingly sophisticated in its approach, it is now recasting itself in a new light. This is being seen positively by the EU, which has long kept the industry on the fringes of policy discussions. The current dialogue between the industry and EU policy- and decision-makers is a very welcome development and seen as an opportunity to be more proactive in shaping and positively contributing to the debate at EU level. Shanghai to Timbuktu

Countries offering investment migration programmes are acutely aware that they risk having their programmes suspended or forced to close if they were to grant residence or citizenship to individuals without thorough background checks. Because of the importance of the sector to many economies, programmes have implemented KYC and due diligence standards that now go far beyond those of the banking and the financial services industries. Employing the services of former intelligence officers, the industry has moved beyond desk research and database searches in its quest to really ‘know the customer’. It is becoming increasingly common practice of programmes, service providers and agents to engage specialist agencies who intensively scrutinise clients coming through the pipeline. From the gleaming towers of Shanghai to the dusty roads of Timbuktu, these firms are employing experts on the ground to verify every aspect of an applicant’s life and source of wealth. KYC and due diligence procedures are particular areas where the industry has attracted unfair criticism. A Better Future

The industry has enjoyed some very positive momentum over the past number of years, with record numbers of affluent citizens seeking out investment migration programmes. A major plus for the industry has been the ability to attract entirely new customer groups to the concept of acquiring a second residence or citizenship, which has helped expand the pool of potential clients and, in turn, widened the choice of programmes available. But it hasn’t all been smooth sailing. Pricing pressures not only impacted the bottom line but also the image of the industry. Although today both policy-makers and the general public are better informed about the industry’s processes and safeguards, this doesn’t mean they are necessarily in favour of it. The industry has no choice but to reinvent its business as one that is more socially and economically attuned to today’s societies. The reward could be a better, more sustainable and more accepted industry. n

A major plus for the industry has been the ability to attract entirely new customer groups to the concept of acquiring a second residence or citizenship, which has helped expand the pool of potential clients and, in turn, widened the choice of programmes available.


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INVESTMENT MIGRATION YEARBOOK 2019/2020

Putting our House in

Order

The development of global standards for the investment migration industry needs to be an urgent priority for the sector. Long-term success will only be brought about if international institutions and civil society have confidence in the industry, writes Bruno L’ecuyer, Chief Executive of the Investment Migration Council. “The most recent attempts of the European Commission to initiate a wider discussion on the topic by inviting experts, civil society and industry representatives is a major step forward to a better understanding of the industry and, hopefully, setting appropriate standards in the near future.” 18

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nvestment migration is a $2 billion industry responsible for significant investment, job creation and societal development, and it accounts for billions of direct and indirect revenues in some smaller sovereign states. However, there are currently no established global standards for investment migration. Setting such standards has always been of exceptional importance for the Investment Migration Council (IMC), while having a clear and coherent framework is now probably more important than ever. There are at least two reasons for that. Firstly, all involved parties should follow a set of harmonised and well-established rules which would certainly contribute to better compliance with global financial regulation. Secondly, having global standards would contribute to an improved understanding of the investment migration industry and improve trust by the outside world. The lack of global standards and good understanding of both citizenship and residence programmes may not only be confusing, but also

a source of distrust towards the entire industry. Money is a sensitive topic. When brought into connection with citizenship, which is perceived by many as something which money shouldn’t buy, but also with wealthy individuals who, unlike many of us, can afford to pick and choose their nationality, the investment migration industry is easily yet unfairly stigmatised. A number of studies testify that an enhanced transparency and better regulatory framework for the industry would mark a significant development in addressing concerns related to investment migration programmes. Finding the Right Balance

While well-designed investment migration programmes imply that the interests of the clients and those of the governments are aligned, this is where key issues usually arise. Plenty of mistakes can be made, undermining the interests of both the government and the clients. For example, the due diligence requirements established by the


INVESTMENT MIGRATION YEARBOOK 2019/2020

government eager to cash in on the programme could be too lenient. While this can be presented as a positive feature, since a visa or a nationality is easier to acquire, this is highly problematic in the long run. When such leniency is discovered, it undermines the trust of other states in the nationalities granted, reducing the value of investment for all clients and, ultimately, undermining the financial viability of the programme. Similarly, programmes lacking transparency, or where rules are not sufficiently clear and strict, can suffer from corruption, undermining trust and value of investments. On the other side of the coin, the attractiveness of a most diligently designed programme can be radically different from real life. Studies show that the added value of some reputable programmes is far from clear, as the investments they generate are not providing sufficient added value to the countries’ economies in order to justify the level of resources required to run the programmes. All in all, very serious individual scrutiny of the components of each residence and citizenship-by-investment programme is required before any conclusions are drawn. Addressing Criticism and Contributing to Professionalism

The investment migration industry has been loudly criticised by several international institutions and organisations. Aiming to contribute to various improvements in the field of investment migration, the IMC takes criticism seriously. It is fair to say that most criticism is largely due to the lack of global standards under which the entire industry should be operating, as well as lack of understanding of the application and assessment procedures. In such circumstances, the European Commission’s view of citizenship programmes as a ‘risk to security’ should not come as a surprise. In fact, the most recent Report on ‘Financial Crimes, Tax Evasion and Tax Avoidance’ of the Special Committee on financial crimes, tax evasion and tax avoidance at the European Parliament (TAX3 Report); the Report of the European Commission on ‘Investor Citizenship and Residence Schemes in the European Union’; and the Study of the European Parliamentary Research Service on ‘Citizenship by Investment and Residency by Investment Schemes in the EU’, have shed a light on a number of aspects which could indeed be problematic in the absence of global investment migration rules. The integrity of the applicants’ background checks and due diligence are highly prioritised by the European Union. This has been discussed along similar lines in all three documents. Thus, the Special Committee on financial crimes, tax evasion and tax avoidance noted in the TAX3 Report that ‘citizenship or residence could be granted through these schemes without proper or indeed any customer due diligence having

Bruno L’ecuyer is the first Chief Executive of the Investment Migration Council, the worldwide association of investor migration professionals. Bruno leads the Secretariat and is responsible for all IMC operations. A regular contributor to international publications such as Forbes, and speaker at conferences in Europe, the Middle East and Asia, he has held positions in London, Paris and Hong Kong. He has extensive expertise and experience in the management and expansion of a professional services association. A member of the Governing Board, Bruno acts as its Secretary.

been carried out by the competent authorities’. The EPRS’s Study emphasised that CBI/RBI schemes ‘enable false statements to be made on residency and can thereby undermine due diligence procedures’. Finally, the European Commission also expressed its concern noting inter alia that ‘in most Member States the family members of investors are not subject to enhanced due diligence, which could entail security risks’. Other problematic aspects emphasised by EU institutions include transparency issues and governance of the programmes, risks of money laundering, corruption and tax evasion, lack of genuine link etc. All concerns deserve proper attention and deeper clarification. The most recent attempts of the European Commission to initiate a wider discussion on the topic by inviting experts, civil society and industry representatives is a major step forward to better understanding of the industry and, hopefully, setting appropriate standards in the near future. The IMC has addressed criticism directed towards the industry on multiple occasions. We will participate constructively in future discussions aimed at the clarification of citizenship migration and at the building of trust and confidence with international institutions and civil society. Furthermore, the IMC has built a strong platform for formal education of those working in the investment migration industry. The new framework for Education and Training that has been created by the IMC will provide for all levels of background and experience. The courses aim at promoting integrity, ethics, transparency and best practices, and will be delivered by IMC Education and Training. A good education is the foundation of qualified professionals. The IMC’s goal is to shape future professionals by helping them improve their understanding of the industry and enabling them to develop valuable skills and knowledge. n

About the IMC

Set up five years ago as a non-profit industry association, the Investment Migration Council (IMC) brings together the leading stakeholders in the field of investment migration. It is the worldwide association of investment migration professionals and the industry’s first and only credible self-regulatory body. As such, the IMC gives the industry a voice and significant accountability. The IMC works towards setting up high standards for the industry to be adhered to by all players. In particular, IMC’s mission has been largely defined by the following five goals: • Setting the global standards in relation to residence and citizenship-by-investment; • Promoting competence, continued professional development and high ethical standards among its members; • Improving public understanding and transparency of investor residence and citizenship programmes; • Contributing to the scholarly field of investment migration; • Being the trusted partner and the leading platform for professionals, academia and governments.

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INVESTMENT MIGRATION YEARBOOK 2019/2020

400+ members Official List of Members 2019 360 Advisory & Management GmbH 360 Citizen Management Consultancies A. Karitzis & Associates LLC Abreu Advogados Academy Finance ACT Advisory Services Limited ACTIVE CAPITAL / WTEC Ahmed Ghattour & Co AIT Accounting & Management Services Ltd Alves & Co AME Second Citizenship Ltd Andreas Demetriades & Co LLC Andreas P. Siapanis & Associates LLC AOM Visa Consulting AP Group Global Areti Charidemou & Associates LLC ARQ Group Astons Group Ltd. Azevedo, Aldet & Moctezuma, Lda BDO Consulting Belion Partners LLP Beshara Global Migration Law Firm BEYOND Residence and Citizenship Bluemina Citizenship & Residency BLVUE Zürich Advisory AG (Ltd.) Bond University Bulgarian Citizenship Ltd Callamus Capital Union Bank Capstone Advisory Co. Ltd Carib International Century Capital Inc. Chetcuti Cauchi Advocates Chriso Savva LLC

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Christina Georgaki-Charavgi Law Office Christodoulos G. Vassiliades & Co LLC Ciba Invest Citizen Lane Citizenship By Investment Unit - Antigua & Barbuda Citizenship by Investment Unit - Saint Lucia Citizenship Solutions CiviQuo CJ International Group SRL CLT International Ltd Cosmic Business Initiation Services Credit Suisse Group CSB International Ltd. Datuk Seri Dr. Nelson Pung Deloitte Malta Dem. A. Nicolaides & Sons Ltd Dimitrov, Petrov & Co Law Firm Discus Holdings DomizilPlus Trust Office DORDA Rechtsanwälte GmbH Efthymios G. Navridis & Asscociates Law Firm Eksper Consultancy Emmanuel Jacques Almosnino Energopiisi Eurofast EU Exiger Diligence Exiger LLC Fakhoury Law Group Fenech Farrugia Fiott Legal Fidesco Trust Corporation Fidescorp Limited Fiduciana Trust (Cyprus) Limited

Fincasa Capital First Advisory Trust reg. Foster LLP, Global Fragomen Worldwide Frendo Advisory Ganado & Associates GICG Global Information Consulting Group Global Citizens Caribbean Inc. Global Migration Global Nomad Consulting Global Residence & Citizenship Practitioners Inc. Globe Detective Agency (P) Ltd. Go2Europe Golden Visa Consultancy Grant, Joseph & Co Green Light Management Consultancy JLT Grenada Citizenship by Investment Programme GVZH Advocates Henley & Partners Hestia Investments Consulting Lda Hill & Hill Chambers Immigrant Invest immVest International Limited Imperio Global Citoyen Integritas Group Inter-Tax Consultants Intercorp International LTD International Center for Globalization and Development International Residency Citizenship Invest & Settle Invest in the USA (IIUSA)


INVESTMENT MIGRATION YEARBOOK 2019/2020

from 55+ countries

Investaureum Lda. InvestIMM Investment Migration Insider Island Living Investment Services Ltd Joseph Rowe Attorneys-atLaw and Notaries Public Katerina Marini & Associates Law Firm KayHan Swiss LLC Ketenci & Ketenci ILP Klasko Immigration Law Partners, LLP KLZT Law Kosdromos Consulting S.R.L KPMG L Papaphilippou & Co LLC La Vida Europe Ltd. Laferla Insurance Agency Limited Latitude Consultancy Limited Law Quest Lawrence Associates Ltd. Lecanda Immigration and Nationality Law Lerotheou, Kamperis & Co LLC LTC Advisory & Services Lund University M-J Global Consultancy Services Magrath Sheldrick LLP Mahandru Associates Maisto & Associati Malta Individual Investor Programme Agency Malta Residency Visa Agency Masri Holding Sal Matthew Cassar Mc Namara & Company - Barristors, Solicitors & Notaries Royal Michael Kyprianou & Co. LLC

Mifsud&Mifsud Advocates Migronis Citizenship MLH Consular Consulting MM2H Neda Azarmehr Neity Maddock New Balkans Law Office Nexia BT Nobel Trust Limited Northern Pointe Development Ltd Novafirm SA Omega Partners International OneWorld Ltd. Ousheng & Partners Papilio Services Limited Passport Legacy Passports Global Ltd PassPro Immigration Services PLAYFAIR Visa and Migration Services Polyglot Ltd. R P Merriman Radu Ghergus Law Firm Rao Consultants RC International Refinitiv RIF Trust Investments LLC Risvas & Associates Law Firm Rosemont Consulting Sarl Rostova & Westerman Law Group, P.A RSM Rutter Giappone Advocates S-RM Intelligence and Risk Consulting Limited SAAD AHSAN Law Company Saeima (National Parliament) of Latvia

Sakeenah Group Scheibert & Associates Shanghai Demei Law Firm Shanghai Overseas Chinese Exit-Entry Service Co.,Ltd Shard Capital Investor Visa Solomon Harris Sothebys International Realty Cyprus Sterling Diligence Sunrise International Legal Services Swiss Insurance Partners AG SwissTaxGroup The Belgium Office Thomas John & Co University of Vienna Valadas Coriel & Associados Valmas & Associates Vardikos & Vardikos Varnavas & Varnavas VIMB Pte Ltd Vincit Union Group VIRIDIAN AG Vironobilis OĂœ Visa Free Europe Visas Consulting Group Inc Wahaat Wailian Overseas Consulting Group Limited World Grenada Inc. World Immigration Service XIPHIAS Immigration Pvt Ltd.

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INVESTMENT MIGRATION YEARBOOK 2019/2020

Education & Training

A Qualified Difference

The Investment Migration Council has established a global education and training division to facilitate and build courses that offer qualifications and training for those working in the evergrowing investment migration industry.

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he development, or rather the apparent lack, of global standards has become one of most pressing issues facing investment migration. Many believe the recent criticism of EU institutions and international organisations will only become louder as the industry continues on its growth trajectory. The main concerns surround the lack of transparency, weak due diligence processes, possible tax evasion, money laundering, and other misuses of existing schemes. While such criticism may seem overwhelming and even unfair to honest players in the investment migration industry, the lack of global standards, which would protect those acting in good faith, takes its toll. It also makes it an easy target for criticism. This is why the Investment Migration Council (IMC) believes that global standards, education and qualifications for those working in the investment migration industry will contribute to a well-respected industry.

A Platform for Education

Bringing together the leading stakeholders in the field of investment migration with nearly 500 members, the IMC may be used as a platform to gather all areas of the industry together to help establish professional standards, benchmarks, competencies, codes of conduct and best practices for those working in or associated with the industry. To that end, the global IMC Education and Training (IMCET) division has been established. IMCET will provide education and training for all levels of staff and experience. The core objectives of IMCET include the following: • Development of professional competencies and standards for those working in the investment migration industry; • Certificated learning opportunities that lead to IMC professional status; • Education and training for all levels of staff; • Delivery of professional training and ongoing competency development. 22

The educational and training programmes offered by the IMC and the resulting qualifications will build solid ground for further professionalisation and responsible growth of the industry. There will be three different levels of qualifications: Certification in Investment Migration; Diploma in Investment Migration; and Post-Graduate Diploma in Investment Migration. The Certification in Investment Migration is an intermediate level course to be studied over six months. This practical introduction will lead to a professional status with the IMC and is benchmarked at Associate level for those working in the investment migration industry. The course will be taught online through IMC’s learning management system and will offer a total of five compulsory modules. Those who successfully complete the programme will be awarded the IMC Certification in Investment Migration. The Diploma in Investment Migration will be a course to be studied over a 12-month period. This programme will lead to Professional status within the IMC and will be the benchmarked professional level for those working in the industry. This will be the first global investment migration course of its type at this level. Therefore, specific entry requirements will apply. Those who successfully complete the programme will be awarded the IMC Diploma in Investment Migration. Finally, the IMC Postgraduate Diploma in Investment Migration will be a specialist qualification designed for senior practitioners working in, associated with or who aspire to work within, the investment migration industry. It will be studied over a 12-month period. This will be the flagship qualification of the industry. It will combine academic rigour with a practical and applied approach. It is designed for those senior managers who will lead the industry into its next phase of development. Therefore, more strict entry requirements will apply. On completing the Postgraduate Diploma, applicants will be awarded the highest level of professional membership awarded by the IMC: Fellowship. n


INVESTMENT MIGRATION YEARBOOK 2019/2020

Jacqueline Gauci, Administration Officer of the IMC

New Membership Structure for a

Stronger Industry Jacqueline Gauci of the Investment Migration Council (IMC) outlines the association’s new membership structure. Can you give us an overview of the new membership structure?

The new membership structure is a solid commitment to further professionalise the association and consequently, the entire investment migration industry. It is also a commitment to standardising the investment migration industry through a portfolio of education and training programmes, which are being launched gradually. There are now five membership tiers for individuals: Student, Academic, Associate, Professional, and Fellow. There are two pathways to IMC membership: the education route or the experience route. It is planned that eventually the experience route will be phased out, and the membership journey will only be possible through the education route, except for Fellows. Can you tell us a bit more about the two routes?

The journey through membership with the education route is the recommended one, since this is expected to significantly strengthen the skills and knowledge of members and by consequence the wider industry. The first step will be the Certificate in Investment Migration, which is intended as an online course with a multiplechoice test at the end. This will lead to Associate membership of the IMC. The second step will be the Diploma in Investment Migration that will lead to Professional membership, and the final step will be the Post Graduate Diploma in Investment Migration, which will lead to Fellow membership. On completion of each course, graduate non-members of the IMC will be encouraged to join the IMC based on their educational achievement. They will be recognised in the industry by the course designation and membership tier they belong to. To follow suit with other professional bodies, membership by experience will be offered to those practitioners who meet the necessary criteria in any membership tier to be members of the IMC. Furthermore, there are two membership tiers for companies: Corporate and Corporate PLUS. These remain unchanged.

How will these changes affect existing members and what requirements do new applicants need to fulfil in order to become IMC members?

The current nearly 500 members within the IMC will retain their IMCM designation and be part of the Professional membership tier where they will receive additional benefits. Those members who have been with the IMC for five consecutive years and have over 10 years’ experience will be encouraged to join the highest tier of Fellow membership. Can you summarise the benefits of being an IMC member for those who are not yet part of your organisation?

The strength of the IMC comes from its members. Members enjoy benefits in terms of getting access to professional development opportunities, training and education, networking, and information services provided by the association. The above benefits enhance the image of the industry and promote professionalism and high ethical standards. Being part of the leading global association concerned with investment-related migration will support companies’ efforts to keep up-to-date on latest trends and developments in the field. Corporate membership is also available with the additional benefit of displaying the IMC membership logo on corporate marketing collateral and online media. What new initiatives do you have in the pipeline that members should be aware of?

With the launch of the Certification in Investment Migration – at our annual Forum held in Geneva in June 2019 – the industry sees an overnight transformation. This entry-level course, designed to be studied over six months, is the first global investment curriculum of its type, and it is specifically designed for those working in this industry. The course is taught online through our learning management system and offers a total of five compulsory modules. The certification has been engineered to prepare participants for work in a changing, vibrant industry where the highest professional standards, ethical values and enhanced competencies are not just encouraged, but required.

Why did you feel the need to change the membership model?

Do you have a final message you’d like to share with your current and potential members about the IMC?

Given the current level of scrutiny of the industry, we felt there was a pressing need for the investment migration industry to demonstrate that it can self-regulate and conduct itself in an appropriate and professional manner. The introduction of the education route, coupled with the launch of the education and training division, supports our drive to enhance the industry’s standards.

The professionalisation of the industry via entry to the IMC by formal qualifications and experience is intended to be a cornerstone of responsible growth and development for the future. We expect that those working in the field and those evaluating the status and value of the investment migration industry will welcome the formal IMC qualifications. n 23

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INVESTMENT MIGRATION YEARBOOK 2019/2020

DR Juerg Steffen, CEO of Henley & Partners

Investment Migration:

The New Normal With 30 years of experience in financial services and as a former private banker, Juerg Steffen knows what effect regulation can have on the dynamics of a sector. The new CEO of Henley & Partners believes that consolidation will be inevitable, but that it will also drive substandard operators out of the market and help normalise the investment migration industry in the minds of international institutions and the public at large.

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s the newly appointed CEO of Henley & Partners, Dr Juerg Steffen certainly has big shoes to fill, following Dr Christian H. Kälin, who was previously at the helm of the firm. Kälin, who retains his position as Group Chairman, has transformed a small firm of wealth advisers into one of the top investment migration firms in the world. Steffen has ambitious growth targets, however. He has set his sights on further developing the firm by entering new markets, including a move into Latin America, and shaping the entire investment migration industry by playing an active role in realising regulatory standards both for agents and for government programmes.

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Next Stage of Growth

After more than 20 years in the private banking sector, Steffen joined Henley & Partners to set up its Singapore office in 2013 and quickly made his presence felt in the investment migration world. “At that time, we were the first firm to look at Southeast Asia, which then became one of our most important markets,” says Steffen. Once he had established the office in Singapore, offices in Malaysia, Vietnam, Thailand and the Philippines followed. In 2016, he moved back to Vienna to take on the role of COO before eventually becoming CEO at the beginning of 2019. Steffen is taking the lead at Henley & Partners at an exciting time in the industry’s development. “Investment migration is entering a new phase, emerging from its niche and some-


INVESTMENT MIGRATION YEARBOOK 2019/2020

times misconstrued position and establishing its place in the mainstream.” Investment migration as a whole has experienced extraordinary development over the past 10 years. Henley & Partners estimates that today there are over 60 active programmes around the world, with about 30 of those being relevant and successful. “This remarkable forward momentum gives no indication of slowing down. Indeed, investment migration programmes are growing in popularity both for investors and for states looking to strengthen and diversify their economies and create new opportunities for their people,” Steffen says. The figures speak for themselves. Investment migration is widely credited with having brought approximately €25 billion in foreign direct investment into EU countries alone since 2010, and “residence- and citizenship-by-investment programmes have been fundamental to several of these countries’ economic recoveries following both the global financial crisis and the European sovereign debt crisis,” Steffen mentions. He has no doubt that more countries will launch investment migration programmes, and that the industry will gain even wider acceptance. “When the first programmes were launched in the Caribbean, there was strong opposition. However, over the years, people have come to recognise the benefits of the programmes, and their existence has become the new normal. I believe the same will happen in Europe, and that we are likely to see the introduction of many more European programmes in the coming years.” Resetting a Reputation

Although it occupies an increasingly established place in the mainstream, investment migration continues to be somewhat misunderstood in some circles, as the sector’s increased visibility has attracted a higher level of scrutiny by the media, policy-makers and the wider public. “This heightened focus, and a number of recently published reports drawing attention to investment migration in general, has in some cases resulted in an unwarranted negative perception of the industry,” Steffen says. As an industry leader, Henley & Partners is playing an active role in addressing this “largely unfounded perception”. Steffen explains that over the past 20 years, Henley & Partners has invested significant time and capital in creating a corporate structure that is wedded to best practice governance and the highest levels of due diligence, even before passing a client over for the consideration of a sovereign state. “We have always advocated making these strict standards of security and due diligence compulsory in order to further improve business practices in investment migration,” Steffen clarifies. He notes that despite Henley & Partners’ numerous calls for constructive dialogue with all stakeholders, limited communication, particularly with institutions such as the European Commission, is one of the reasons the

industry has historically been misunderstood. As Steffen observes however, the situation is changing, as communication with all relevant stakeholders improves. Regulation and Consolidation

“Investment migration programmes are growing in popularity both for investors and for states looking to strengthen and diversify their economies and create new opportunities for their people.”

In addition to setting up its own due diligence procedures and processes, Henley & Partners has repeatedly called for regulation of the sector and will continue to do so. Steffen reiterates that “the time has come to implement a regulatory framework that will ensure that only those committed to the highest standards of governance and due diligence can operate within the industry”. He is convinced that this will drive many sub-standard operators out of business and fuel the consolidation of the industry. “I am pretty sure the investment migration industry will follow the asset management sector in this aspect. When I started in private banking at the age of 19, there were many small operators in the industry, staffed by just two or three people. However, as regulations were progressively implemented, it became almost impossible to run a small-scale operation. Today, any asset management operation needs at least 10 to 20 people to ensure proper compliance,” Steffen explains.

Dr Juerg Steffen is the Chief Executive Officer of Henley & Partners. Juerg has over 30 years’ experience in the financial services industry and is widely regarded as a leader of the investment migration industry. After joining Henley & Partners in 2013 to set up the firm’s Singapore office, Juerg went on to establish Henley & Partners as a key player in what has become one of the industry’s key regions. Later appointed Chief Operating Officer of the group, Juerg has played a pivotal role in growing the firm and, indeed, the investment migration industry at large, improving Henley & Partners’ operational standing and developing key structures and processes that enable the firm to keep the industry-leading position it enjoys today. Before joining Henley & Partners, Juerg was a personal advisor in the family office of one of Europe’s wealthiest families. Prior roles include serving as a member of the management board and head of the Wealth Planning department of a leading private bank in Austria. Juerg has also been a Director in the Cross-Border Wealth Planning department of UBS in Zürich, where he advised high-net-worth individuals and key clients in complex matters regarding financial, tax, succession, and residence and citizenship planning. He has also established and developed a private bank operation for one of the leading banks in Switzerland and is the editor of the definitive books on HNW relocation to Austria and Switzerland.

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INVESTMENT MIGRATION YEARBOOK 2019/2020

Open to Opportunity

While Henley & Partners is looking for takeover targets, the firm is not yet acting as an active consolidator. Steffen mentions that Henley & Partners established an M&A department two years ago, hoping that further growth could be achieved by finding firms that it could cooperate or merge with. However, only a handful of firms were identified that were of interest to Henley & Partners, and the owners of those firms did not want to sell. “For the time being, we realised that it is better for us to open new offices to get into new markets. We are obviously still looking around,” Steffen says. Henley & Partners has enjoyed years of constant growth, and today has offices in some 30 countries around the globe. “Because our clients wish to have a point of contact once they arrive in a new country, we have offices in all countries whose programmes we promote,” Steffen says. In terms of future expansion, Steffen notes that Africa is an interesting growth market. Henley & Partners already has two thriving offices in South Africa, and the firm is in the advanced stages of opening fully fledged offices in two additional key markets on the continent. Steffen’s other big plans relate to Latin America. “This is the only region where we are not yet active. We are definitely planning to change that in the coming years,” he says. Advancing the Global Discourse

As the CEO of one of the leading firms in the sector, Steffen is also keen to shape the discourse on issues of global importance and to continue to play a role in contributing to a more interconnected and more tolerant world. “We have a shared global responsibility to address the imbalances created by deepening globalisation. It is increasingly clear that we must find innovative ways of approaching sovereign funding and public finance. For countries trapped in a pattern of negative debt, the near impossibility of breaking the cycle via traditional methods means that the problem is sometimes met with defeat or resignation,” he explains. Steffen observes that the investment migration model is a highly effective and revolutionary means of addressing this pervasive issue. Steffen argues that the industry has an unmatched capacity to expand a state’s ‘sovereign equity’ by enlarging the number of citizens who actively contribute to its future well-being and insulate it from the ramifications of external debt restructuring. “From the Caribbean to Malta, there is mounting evidence that sovereign equity, made possible through investment migration, is a ground-breaking approach to ensuring ongoing economic growth and prosperity, and a long-term positive solution to the persistently destructive problems caused by bad debt cycles and limited inbound investment,” he says. It is a solution, Steffen says, that injects new liquidity into an economy, creates sustainable income streams that can support public finan26

“Investment migration is widely credited with having brought approximately €25 billion in foreign direct investment into EU countries alone since 2010.”

cial needs, attracts much-needed foreign direct investment, and provides greater national autonomy and prosperity for all citizens. According to Steffen, investment migration has the potential to transform the way sovereign states and the wider geopolitical and financial communities conceptualise sovereign funding, foreign direct investment, and public finance. “We look forward to supporting countries around the world as they adopt this innovative sovereign funding model,” he says. Towards the Future

Steffen points out that the recent launches of citizenship-by-investment programmes in Montenegro and Moldova are the latest in a string of examples illustrating that sovereign states around the world increasingly view these programmes as a sustainable and vital form of foreign direct investment, one that results in greater long-term prosperity for countries and their people. “I have no doubt that more countries will soon follow suit, and that the investment migration industry’s performance will continue to exceed all expectations in the year ahead,” Steffen says. He is certain that the industry will continue to change, evolve, and transform itself to meet the needs and demands of global investors and sovereign states and their people. “Investment migration is a multi-billion-dollar industry that drives significant liquidity streams and creates real societal value. We believe that its continuing growth will drive the industry towards regulation, and that this should be welcomed. Persistent growth will also result in an increasing number of states around the world experiencing the significant benefits that are derived from hosting prudently managed citizenshipor residence-by-investment programmes that drive investment without adding to the burden of debt.” n


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INVESTMENT MIGRATION YEARBOOK 2019/2020

Austin T. Fragomen Jr., Chairman and Partner at Fragomen

Diversify to Grow

Fragomen is widely seen as the leading law firm focused on providing immigration services worldwide. How was 2018 for your firm and what initiatives are high on your agenda for 2019?

2018 was a good year for Fragomen. We grew by around 10% and are now one of the biggest firms offering immigration services. We are number 80 on the list of the world’s largest law firms, and in the US, we are ranked number 60. From individual private clients and small local businesses to the world’s largest companies, we offer support and advice on all immigration needs. In terms of investment migration and our private client practice, we are experiencing big movements mainly due to the changing dynamics in the mainland Chinese market. Thus far, mainland Chinese nationals very much dominated the investment migration industry, which is particularly true when it comes to immigrating to the US. Given the current difficulties and restrictions, key stakeholders in this industry are eager to reduce the reliance on the mainland Chinese market. Hence, one of our top priorities is diversification. We are further building and developing our referral networks and forging new relationships with corporate service providers, accountants, lawyers and real estate experts in a number of new jurisdictions. At the same time, we are educating potential mainland Chinese clients who may be interested in locations other than the US, since we offer immigration services into over 150 countries. Geographically, where exactly are you planning to expand?

Titan of industry is not a term that is easily attributed. Austin Fragomen could lay claim to this title, but it is certainly nothing he would ascribe to himself. However, with more than 4,200 employees, offices in almost 30 countries and a ranking as one of the top 60 legal firms in the US, it is a title that sits easily with someone of his calibre. The IM Yearbook spoke to him about the major trends currently influencing the investment migration industry and how the sector will evolve over the next years. 28

India is interesting; it is a massive market. We are very well connected in India because on the corporate side of our business we already represent a number of major companies, particularly in the Indian IT space. We have around 500 people working for us in India, and are the dominant service provider in that space. So we work off our considerable contacts and organise seminars in different cities and so forth. In general, we are particularly interested in Southeast Asia. We have been doing a lot of marketing not only in Vietnam, Indonesia and Thailand but also in Malaysia, which has a very interesting programme based on real estate. We have an alli-


INVESTMENT MIGRATION YEARBOOK 2019/2020

Then there are a number of countries with much lower entry requirements, but I would argue that they are also less desirable destinations for most. I am not convinced that getting citizenship of a Pacific island nation is going to be the best solution, especially not if visa-free travel is the main objective. One of the other big developments that we are seeing is that international organisations such as the EU and the OECD have come out against economic citizenship programmes. The question remains if and what actions will follow. Would the EU for instance curtail visa-free access for individuals from certain countries? This would definitely be a game changer.

ance with a very strong regional law firm based in Kuala Lumpur with offices in many southeast Asian countries. In addition, we consider South Africa an interesting market, and we continue to do a lot of business in South America, particularly in Brazil and Mexico. Some say Africa is the rising star of the future. Do you agree?

In Africa you have many developing nations and some interesting frontier markets, such as South Africa and Nigeria, which are further along and interesting. But is the whole of Africa the way to the future? I don’t think so.

What would you highlight as the other most noticeable trends at the moment?

In terms of your marketing efforts, are digital channels playing an increasingly important role in acquiring clients?

I still think that the traditional referral networks will remain the main channel to generate new business as opposed to digital media. Word of mouth still resonates with high-net-worth individuals and their advisory network. There is a general anti-immigration trend that is currently permeating immigration policy around the globe. The bottom line is that countries are becoming more restrictive, and programmes will most likely become more expensive. Take the USA’ EB-5 visa as an example. There are executive branch proposals that the investment threshold should be raised from $500,000 to $1.35 million. This means investment migration will not remain as attractive to the mass affluent market as it is today. The industry will lose those successful middle-class mainland Chinese clients who have really driven the market so far. In my opinion, the client profile will change, and the focus now and in the future needs to be on attracting high-net-worth and ultra-high-net-worth individuals, as those will be the clients who will continue to afford these programmes. This changing client profile also affects our marketing measures. We are dealing with more sophisticated, wealthier people, and attracting them through social media is not going to work. There are a number of programmes that are using price as a lever to attract a broader spectrum of applicants. Do you think these programmes will be an attractive choice for candidates of more modest means?

The US and the UK are still among the top destinations for many of our clients. However, we have seen numbers drop for the UK programme since the investment threshold was raised a few years ago. So, yes, we are definitely seeing the emergence of a second tier; programmes such as those of Malta and Cyprus are receiving a lot of interest. These countries might not be a client’s first choice, but they make a lot of sense if the goal is to get access to the European Union.

Austin Fragomen is Founder and Chairman of the Executive Committee for Fragomen, one of the world’s leading law firms dedicated exclusively to immigration services worldwide. Established in 1951, Fragomen has grown from a respected domestic US immigration law practice to a truly global organisation. Austin has served as staff counsel to the US House of Representatives subcommittee on immigration, citizenship and international law and as an adjunct professor of law at New York University School of Law. Also, he has testified before Congress on a range of immigration issues and before the immigration sub-committees of the House and Senate to share his knowledge on a variety of business immigration issues.

The hot news is the emergence of entrepreneur programmes, which are becoming increasingly popular. However, the problem in my opinion is that no one has really defined what an entrepreneur is. What happens to an entrepreneur should the business not take off? Then you just have another immigrant who doesn’t have any money. There are obviously ways to deal with it, including granting only provisional residency rights until such time the entrepreneur proves his/ her business is successful. I think some of these entrepreneur programmes need to be tweaked a little. However, there is certainly a market for those programmes. On the other hand, I think the political support for anything that includes ‘buying status’, and particularly passports, is decreasing. There is too much negativity around that, and I think it will be difficult to get new citizenship programmes off the ground. I believe new programmes will be leaning more towards residency rather than citizenship. In addition, more programmes will be designed to create employment and economic activity, while programmes just requiring a cash donation to government will be harder to justify in the future. The political environment is more frightening than many people may realise. That is true for migration in general. The number of migrants in the world keeps growing due to issues such as poverty, famine, economic crisis, wars and so forth. The rhetoric surrounding these issues has definitely created a negative climate, and this has a real effect on the entire industry. What is your outlook for the investment migration industry over the next five years?

Despite the difficulties we talked about, I am still bullish on the market for this type of investment. It is positive that there are presently more people interested in these programmes than there were a few years ago. I also believe the high demand for these programmes will be a counterforce to the more restrictive trend that we are witnessing, and it will ultimately drive government policy. n 29

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INVESTMENT MIGRATION YEARBOOK 2019/2020

Zac Lucas, Founder of Centenal Pte Ltd.

Taxing Times:

Why the OECD Didn’t Get it Right Zac Lucas talks about the Common Reporting Standards, the OECD’s blacklist and the need to bring immigration consultants into the regulatory fold.

All of this should be viewed in the context of the big privacy push that is going through the EU at the moment, including the General Data Protection Regulation (GDPR). The GDPR and the CRS are complete opposites, and not easily compatible. It is ironic that the OECD was the organisation that actually championed privacy guidelines in the early 1980s, but they seem to have forgotten about that. The European Court of Justice (ECJ) has already ruled against an infringement in privacy with respect to police retention of records, and I am almost certain that should there be a case ‘GDPR versus CRS’, the OECD will have to significantly amend the CRS rules.

How would you describe the current environment and tax implications for highnet-worth individuals and their advisers?

High-net-worth individuals are on the radar of tax authorities around the world, and they have to navigate a difficult and complex landscape since the introduction of the OECD’s Common Reporting Standard (CRS). Many wealthy individuals who are doing business internationally are facing the issue that they are involved in structures that are not recognised by tax authorities in their home countries. For instance, many civil law countries do not recognise the concept of a trust, which then in turn creates significant issues once that information is reported under CRS to the tax authorities. In addition, affluent individuals are sometimes advised to set up certain structures and are told that these are not reportable, but this might not always be true. On the advisory side, the situation is equally complex. The proposed Mandatory Disclosure Rules (MDR), designed to supplement the CRS, are intended to be retroactive, and the OECD has put October 2014 as the start date. This means that a lot of the activities that happened in the run-up to the implementation of the rules will need to be looked at. One suggested method of enforcement would involve a name and shame mechanism, which would be a threat to the professional reputation of advisers. This could easily result in advisers being taken aside by government officials when they fly in to see their clients, based on prior MDR reports. It is now becoming a personal security issue for tax advisers. In my opinion, we have seen a rollout of mass surveillance measures, and the CRS is one of them, supplemented of course by the proposed MDRs.

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In your opinion, can residence and citizenship programmes potentially be used to misrepresent an individual’s jurisdiction of tax residence and endanger the proper operation of the CRS due diligence procedures?

“One suggested method of enforcement would involve a name and shame mechanism, which would be a threat to the professional reputation of advisers.”

The CRS is filled with loopholes, and there are much simpler methods for individuals who want to circumvent the CRS to use than misuse of a residence and citizenship scheme. I’ll give you an example. The CRS contains an “Active NFE” classification (Active NFE means an entity that holds a financial account where the relevant financial institution cannot report the ultimate beneficial owners of the entity), termed a “Start Up” Active NFE. Account holders may take advantage of this classification in order to avoid reporting under the CRS for a period of up to two years, when in fact they never had a real intention to start a business. The other area of abuse, which some think is rampant at the moment, involves the misuse of what is termed “Managed Investment Entities”, which are typically owner-managed personal investment companies that grant some discretionary portfolio management to either a bank or external asset manager. A Managed Investment Entity is not subject to CRS reporting by the various banks and/ or assets managers that are connected to the entity. Instead, the Entity itself is supposed to do its own reporting, which some believe is not then occurring.


INVESTMENT MIGRATION YEARBOOK 2019/2020

But do you believe it is possible to use the residence route to circumvent tax?

What’s your outlook for the industry?

I think we will see more regulation. We need to keep in mind that there are two things that don’t win any votes: being soft on terrorism and being soft on high-net-worth individuals. So it might become a lot harder to access EU countries in the future, and I think things like a simple speeding fine will be held against applicants. We might also see a curtailing of certain benefits, such as visa-free travel, that these programmes offer. I would not be surprised if the Caribbean countries that are currently enjoying access to the European Union might not get these kind of perks in the future. However, all of this depends on whether the industry will experience continuous scandals. From a tax perspective, the future is more uncertain as a lot of the issues that I have flagged have yet to hit the market. Tax authorities around the world are only now waking up and starting to understand the information they have received from the CRS process, and deciding how they should react to it. A major game changer would be if non-financial assets, such as land and property, would be included in the CRS. Many ultra-high-net-worth individuals are currently investing in these asset types, basically transforming reportable capital into non-reportable capital. n

In my opinion it is very difficult. We now have the OECD’s high-risk jurisdiction list, and most countries that are involved in the investment migration industry are on that list. If clients from any of these jurisdictions seek to open a financial account, a modestly trained compliance team will be difficult to fool. The moment the client produces proof of residency from any of those jurisdictions, some fundamental questions will be asked. Some three or four years ago, the situation might have been different, but today the large banks are very careful and actively protect their reputation. To make it through, high-net-worth individuals would have to build up a chain of collusion that includes their bankers, lawyers, advisers and so on. However, ultra-high-net-worth individuals are not putting themselves in such a precarious position, and high-net-worth and mass affluent individuals simply don’t have the resources to achieve this level of collusion. So why is it that the investment migration industry and high-net-worth clients are being discussed in this context?

Here we need to talk about the sloppiness of the industry. The industry is made up of a lot of advisory firms. They seem to know their own jurisdiction very well but they might not be familiar with the legal implications in other countries. Furthermore, while there are many knowledgeable advisers, there are still some ‘cowboys’ in the industry who might not even ask what the true intention of the applicant is, or the underlying purpose. Besides, in many markets the immigration adviser is not necessarily the first point of contact for high-net-worth individuals. Let’s look at China or India. These countries do not have open markets; you don’t get in that easily, unless you are a brand. So consultants need to network their way through to be introduced to a high-net-worth family. The immigration specialist might be the third or fourth supplier that these families get introduced to. This also means that in many instances the immigration consultant just doesn’t know what happens next, and why a residence or passport was sought. What’s your suggestion to address this issue?

Zac Lucas is the Founder of Centenal Legal Technology Group. Zac is a practicing lawyer with over 20 years legal experience, admitted to practice in England and Wales, and is a former Partner of various international law firms advising on all areas of international private client law. Zac has particular expertise in relation to the OECD Common Reporting Standard (CRS). He has been engaged by a number of leading private banks, trust companies, wealthy individuals and families, and a governmental authority, to advise on the practical implementation of the CRS.

The industry needs to bring immigration specialists into the regulatory fold, where this is not yet the case. I don’t think self-regulation will work, due to the lack of enforcement power. Once consultants are regulated and subject to Anti-MoneyLaundering laws, many of the current issues will disappear.

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INVESTMENT MIGRATION YEARBOOK 2019/2020

Bob Kraft, President of IIUSA

Time for

Renewal

America’s EB-5 Programme has been the most successful immigrant investor programme in the world. However, a series of short-term extensions and the constantly growing quota backlog mean its future remains uncertain. The IM Yearbook spoke to Bob Kraft, President of Invest in the USA (IIUSA), the industry trade association of the EB-5 Regional Centre Programme, about the way forward.

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INVESTMENT MIGRATION YEARBOOK 2019/2020

n increase to 50,000 investor visa units and a rise in the minimum investment amount to roughly $750,000 are some of the suggested changes that Bob Kraft, President of Invest in the USA (IIUSA), believes are necessary but sensible enough to ensure the future success of the EB-5 Programme. Over the years many have called for significant reforms of the EB-5, especially when it comes to the Regional Centre Programme, amid concerns about fraud. The programme has however remained unchanged, but Kraft says the potential for a thorough legislative overhaul has never been greater. “For a long time, the US industry was very fragmented in its positions, and it was only recently that we managed to find common ground that allows us to speak with one voice and drive the discussion forward,” says Kraft.

However, bringing the industry together is not the only hurdle. As in other countries, the whole immigration debate is very emotional and “has been a political football used by both parties”. The EB-5 industry is just “a tiny piece of the overall immigration picture, although we are probably the most productive. However, disagreement on the entire immigration issue has thus far also prevented any advancement on the EB-5 front.” IIUSA is now hoping to get its bill rewritten and get Congress to tackle EB-5 separately from other immigration questions. “I am optimistic that all these efforts will lead to updated legislation,” says Kraft. Priority Areas

30 Years Running

Since its inception in the 1990s, the EB-5 Programme has seen a total of 20 extensions, but without the much-needed reforms. The latest extension is running through to the end of September 2019. The EB-5 Programme is far too valuable to the US economy to simply end it. According to IIUSA, the programme has raised more than $35 billion since 2008. During the federal fiscal years (FY) 2014 and 2015 alone, nearly $11 billion in capital investment was invested in EB-5 projects, accounting for 2% of all Foreign Direct Investment net flows to the US economy. More than 355,000 jobs were created as a result of the programme in FY2014 and FY2015 alone. “During the 2007/2008 downturn, EB-5 money was actually responsible for a large part of economic activity because funding from the banks dried up. It is a great tool that has been very effectively used across the country,” says Kraft. He highlights that in the early days of the programme, EB-5 money accounted for as much as 100% of project funding, which then moved down to 50% of project value, and today comes in at around 25%. A whole host of projects are partly financed by EB-5 money, ranging from hotels and manufacturing plants to hospitals, schools and metro systems. Driving Reform

While many within the industry have long acknowledged the need to overhaul the programme, Kraft mentions that disagreement between the various stakeholders on the way forward meant it was difficult for US lawmakers to put a package together that was acceptable to everyone. They wanted the industry to work out a solution and then come back. “One year ago, we agreed to look beyond the animosity in the industry and identify those areas where we were in agreement, compromise on issues on which we could not get together in the past, and present a united front to Congress. Since then, we are having weekly meetings with the groups that are working on new legislation.”

Robert W. Kraft is the President of IIUSA’s Board of Directors and has been an active member since 2007. He is also Chairman, President and CEO of FirstPathway Partners (FPP), a firm that helps foreign investors become United States citizens under Homeland Security’s EB-5 Regional Centre Programme. He has more than 40 years of international business experience at the Executive and Board levels.

IIUSA is targeting a six-year authorisation, “which would place the programme on very solid footing”. The number one priority is to increase the number of visas that can be issued. “Part of the problem was that the cap of 10,000 visas was interpreted in a way that family members were counted as individual visa holders. A cap of 50,000 investor visa units, combined with the proper interpretation of family members and main investors, would provide the programme with a solid runway for growth,” says Kraft. Still, there are some contentious issues. “We are not in agreement with raising the minimum investment to $1.35 million as indicated in the recent draft regulation.” While IIUSA does not contest the need to increase the required investment given that it has remained at $500,000 since the programme’s inception, an increase to $750,000 or $800,000 is seen as acceptable from the industry’s point of view. US lawmakers, however, are looking to other international programmes where applicants routinely pay in excess of $1 million. Giving the standing of the US in the world, lawmakers believe the US programme should be on par, if not ahead of what other jurisdictions are requesting. Other aspects of the regulation aim to strengthen reporting standards and are putting more responsibility on regional centres to protect investors. “These elements will be beneficial, as would be a faster processing time. We also aim for more clarity with regard to the projects that qualify for funding from the programme,” says Kraft. One of the key criticisms about EB-5 is that investment is not always channelled into rural and high-unemployment areas as it was originally intended. Kraft believes that more clarity will help EB-5 to fully unleash its potential for job creation. n

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Edward Beshara, Managing Partner of Beshara Global Migration Law Firm

Why Strategy is Everything EB-5 has for many years been a runaway success. But with ever-increasing waiting times and long delays for some nationalities, defining the right strategy has become the most important exercise of the immigration process, says Edward Beshara, US Attorney at Law.

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he USA’s EB-5 Programme has long been considered the gold standard of residenceby-investment programmes in the world. However, to keep investor interest high, stability and predictability need to again become the hallmarks of the programme, says Edward Beshara of Beshara Global Migration Law Firm. “While there is definitely a need for new, modern legislation to ensure that EB-5 remains a competitive choice for high-net-worth investors now and in the future, there are also many other avenues that applicants can explore if they wish to enter the US. In fact, the EB-5 Programme might not always be the first or best choice,” he adds. Boom Years

Although in existence since 1990, EB-5 experienced a boom in interest during the past 10 years 34

following the 2008 financial crisis due to a combination of factors, says Beshara. With liquidity squeezed and banks refusing to lend, US developers started promoting the programme extensively in an effort to access low-cost EB-5 funds to secure financing for their projects. Another reason for the rise in applications was the cooccurrence of Canada’s decision to phase out its federal Immigrant Investor Program. The US suddenly became the preferred destination for wealthy foreign investors, predominantly mainland Chinese nationals, seeking both economic opportunities abroad, as well as educational opportunities for their children. Regaining Competitiveness

“I think in some ways the EB-5 has become a victim of its own success,” says Beshara. “The waiting time for Chinese investors is just one example of this.” Due to the annual ceiling limit of 10,000 EB-5 Conditional Resident Visas for


INVESTMENT MIGRATION YEARBOOK 2019/2020

investors and their family members, and the presence of per country limits, Chinese investors today face an estimated waiting time of 14 years. He points out that applicants also need to take into account that the monthly State Department Bulletin for available visa numbers per EB-5 category is different than the actual or real time delays or retrogression. Beshara also mentions that in the early days of the programme, EB-5 petitions were approved in one to three months. As soon as the petitions were approved, investors could apply for their conditional residence visa. “In general, when we file a petition today, it takes about 24 months before the government comes back to us. Investors also need to factor in another five to six months until they receive their conditional green card. But as I mentioned previously, this timeframe is extended to 14 years before Chinese investors can apply for their Conditional Resident Visa.” Beshara believes that speeding up the petition and application process, as well as increasing the number of Conditional Resident Visas per year, would go a long way towards improving EB-5’s overall competitiveness. “We have to keep in mind that EB-5 is only one of many investment migration options available in the global marketplace, and at times the investment opportunities offered in other countries might sound more appealing to investors,” says Beshara. “I always point out that the EB-5 investment is 100% at risk from a business perspective. Investors and their advisers need to do their homework and look into the projects they plan to invest in and their history of success. Businesses and projects can fail, and there cannot be a guarantee that investors will get their money back.” This also applies to projects associated with a Regional Centre licence. “While investment through the Regional Centre Programme can be an EB-5 compliant project for immigration purposes, it does not mean that the US Government is approving the business viability of the project.”

may be obtained in a few months, for entry of the investor and their family. He also noticed a substantial increase in the volume of citizenship by investment applications in other countries, whereby the final goal remains to enter the US. “One solution involves obtaining citizenship in the Caribbean country of Grenada, a country that has both a citizenship by investment programme and a bilateral E-2 investment treaty with the US.” Once becoming a citizen, the new Grenada citizen is eligible to apply for an E-2 investor work visa for the US. This can be a solution to fill the gap until the investor is able to apply for US permanent residence, or it can be an option instead of the EB-5 visa scenario. Obtaining citizenship in Grenada may be the first choice compared to other E-2 treaty countries, given that high-net-worth investors can obtain citizenship in Grenada in three months. Despite these alternatives, Beshara believes that new EB-5 legislation is required sooner, rather than later. “The US remains a magnet for immigrants coming from all corners of the world, but in my opinion, Congress must act fast to push through new legislation otherwise investors will start seeking other options, some of which may be outside of the United States.” n

A Plethora of Options

“The USA’s EB-5 Programme has long been considered the gold standard of residenceby-investment programmes in the world.”

Although new EB-5 legislation and/or US Immigration Regulations have yet to materialise, the US has not lost its appeal to wealthy investors. “However, it is essential to find the best strategy for each client,” says Beshara. In the past, Chinese nationals accounted for 85% of EB-5 investment volume and even though their numbers have dropped, they still are in the majority per year, according to Beshara. “The majority of investors are looking for relief from the quota backlogs and for greater certainty, and there are alternative US visas to the EB-5 Programme that can be more attractive, depending on the circumstances,” he says. Many of his clients are more interested in securing educational opportunities for their children rather than a new residence location for themselves. “In these cases, it makes a lot more sense to apply for a student visa.” Another option might be to apply for an E-2 treaty investor visa, which works for citizens of countries with bilateral investment treaties with the US. The E-2 visa

Edward Beshara is Managing Partner of BESHARA GLOBAL MIGRATION LAW FIRM based in Orlando, Florida since 1983. He has been exclusively practicing US Business Immigration Law (including the E-2 treaty investor, intra-company executive transfers, and National Interest petitions) and offering approvable strategies and solutions to foreign nationals throughout the US. He represents corporate and individual clients from all countries worldwide in regard to their US immigration goals. Edward has been representing foreign national investors and corporate clients in regard to the EB5 process since 1991, and concentrating on the EB5 Regional Centre and individual EB-5 Direct process for over ten years.

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INVESTMENT MIGRATION YEARBOOK 2019/2020

Larry Wang, President of Well Trend United

Inside China’s Migration Industry:

Too Big to be Ignored Chinese nationals are among the top applicants for residence programmes across the world; yet, they are encountering more barriers than ever to realising their emigration plans. Larry Wang, President of Well Trend, talks about the deregulation of immigration consultants in China, the EB-5 backlog, and what Chinese clients really want.

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How would you describe the current immigration market in China?

The good news is that demand is still very strong, despite the fact that the Chinese economy is slowing down. December 2018 marked the 40th anniversary of China’s  reform and  openingup policy, and the appetite to go abroad by those that got rich during the past decades continues unabated. The bad news is that the government has deregulated the market. From February 10th 2019, immigration consultants operating in China are no longer required to have a licence. My firm Well Trend has been around for 24 years, and we are now witnessing a massive influx of new start-ups. Why did China decide to drop the regulation at a time when most countries are moving towards regulating agents and service providers; and what effect will this have on the industry?

I would really like to know the answer to that, but I can only guess that the Chinese Government wants to be seen as open. As I mentioned, we have seen a lot of new firms coming into this market. In one Chinese province we have seen

almost 6,000 new immigration consultants starting to operate, and we estimate that in the whole of China close to 20,000 new immigration consultants entered the industry since the deregulation. Among them are wealth managers, real estate companies, and even travel agents who feel they have clients interested in migration products but don’t necessarily have the required knowledge and experience in this industry. I am pretty certain that a good number of these firms, probably around 35% of the new entrants, will be gone in a few months, and the market will ultimately decide which firms are capable and therefore will survive. However, in the short term this means that clients need to choose carefully which immigration consultant they work with. How is the Chinese Government looking at the industry at the moment? There seems to have been a drive to get Chinese to invest at home rather than abroad.

China is still encouraging people to go abroad, but the biggest challenge these people are currently facing are currency controls. It is not easy for Chinese high-net-worth individuals to transfer money abroad. Every Chinese individual is only allowed to transfer up to $50,000 per year


INVESTMENT MIGRATION YEARBOOK 2019/2020

out of China. Obviously, that is not enough for immigration purposes. Looking at the EB-5 Programme, they need to make an investment of $500,000. That means applicants would need to find 10 people who would pool in their annual quotas for moving money overseas, or use their international network to source the funds. What countries and programmes are high on the agenda of Chinese high-net-worth individuals?

For 80% of our clients the two main drivers are securing visa-free travel for business and leisure, and better education for their children, whereby many families are seeking ‘native English education’. This also explains why the US and Canada are still the top two destinations for Chinese nationals. The issue with many other programmes, especially the European ones, is that they don’t provide English-speaking educational opportunities, and hence they are not as attractive. The fact that education is the main driver also means that the main applicants don’t necessarily want to go abroad themselves.

“December 2018 marked the 40th anniversary of China’s reform and openingup policy, and the appetite to go abroad by those that got rich during the past decades continues unabated.”

What advice do you give them in relation to EB-5 given the long waiting time?

In my opinion the EB-5 programme is not the best solution for many of our clients. As I mentioned, most Chinese just want to send their children to the US to study. Many of my clients are well-established and successful entrepreneurs who want to stay in China, and they also want their children to come back to China after completing their studies. We are also pointing out to our clients that once they have obtained their visa as part of EB-5, they have to live in the US, otherwise they might lose their status if they don’t apply for a leave of absence. So I think the EB-5 programme is not the ultimate solution, and depending on the circumstances, it makes more sense to apply for a student visa for their children. How attractive are programmes in Europe to your clients?

It is increasingly becoming more difficult to enter the US and Canada, so our clients have no choice other than to consider other countries. Europe is becoming more and more popular in the Chinese market. The Greek programme is very price-competitive, and saw a lot of traction last year. However, I think a lot of agents have over-promoted the programme, and this year we will not see the same momentum as last year. The numbers will be lower. However, the investment of €250,000 is very attractive to the majority of people in China. In Beijing, real estate prices are excessively high, and for the price you need to pay for an entire house in Greece you would only be able to purchase a kitchen in Beijing. I also see Portugal, even though the investment requirement is double at €500,000, as an attractive

market. Several years ago, there were some problems with the programme, but I hope to see the return of the Chinese in Portugal in 2019, especially with the US becoming more and more difficult. Given that it is English-speaking, Ireland is also becoming an attractive option. In my opinion, Malta and Cyprus need to stabilise their programmes, also vis-à-vis the European Union, in order for them to become more attractive. In Malta, the process is also very slow, and we have some clients who have been waiting for almost a year, which is very frustrating for them. What’s the acceptable timeframe for Chinese clients?

That’s an interesting question, as most clients want to get their visa as soon as possible, even though they don’t want to go immediately. Once they have their visa, they often ask me when they have to be there at the latest for it not to expire. This is an issue of trust, and therefore, they want to hold the visa in their own hands as quickly as possible. I would say that three to four months is an acceptable processing time. Many programmes are coming up with different investment options. What is the preferred investment route of the Chinese?

Larry founded Well Trend in 1994 starting with just two employees. Now Well Trend has over 400 employees and offices all over China, as well as in Vancouver and Budapest. Wang is regarded as an immigration pioneer in China since Well Trend was one of the first to introduce Canadian, American, and European programmes. Wang is highly sought after for his views on immigration, having been interviewed by all major international and Chinese media outlets. He is regularly invited to speak at immigration conferences in North America, Asia and Europe.

Well, I always advise clients that they first need to focus on the immigration aspect, and not on the return on their investment. While it is not impossible to achieve both, I always tell them to prioritise immigration. Overall, I am not a big fan of the equity option and programmes that require applicants to become a shareholder of a company. This route is too complicated for them. I think a loan option is a better way; it is much more straightforward and it is also a safer investment. In terms of real estate, I am not saying the opportunity in some countries is not good, but our time and energy is limited, and we need to focus on what makes most sense to our clients. What recommendation would you make to programme operators and agents seeking to market their programmes in China?

I would advise them to focus a bit more on the needs of the clients rather than their own. China is a very important market that should not be ignored. Due to the EB-5 backlog, some agents switched their attention to other markets, such as India and Vietnam, but even taken together, these markets are not as large as the Chinese market. I also feel that Chinese immigrants should be welcome wherever they go; they are very diligent, loyal and hard-working people. And I am pretty certain that the Chinese market is a lasting one that will be around for many years to come, although it is a bit difficult to ascertain which programmes will be popular in China over the coming five years. n 37

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INVESTMENT MIGRATION YEARBOOK 2019/2020

Martin O’Connor, CEO of Kylin Prime Group

We Need to Enter an Era of

“Coopetition”

Successful industries thrive on having the culture and ability to compete vigorously but at the same time collaborate strategically - ‘coopetition’, and the investment migration sector is no exception, says Martin O’Connor, CEO of Kylin Prime Group. He calls for an enhanced dialogue between international institutions, countries and companies for the greater benefit of the market and society. Kylin Prime has an unusual operating model compared to many in the industry. Can you tell us a bit more about it?

We have adopted a very specific model and created what we call an entire ‘ecosystem’, which means we can offer our clients holistic packages provided by different companies within the group. Kylin Prime Group is our master brand, and within that group for example, we have Kylin Prime Funds, Kylin Prime Capital, Kylin Prime Family Office and Trusts and Corporate Services; while Ousheng & Partners focuses on global mobility and RCBI programmes. These companies all work closely together focused on investment security and return on investment; ensuring that transparent investment vehicles are being used.

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“I believe in an environment that allows firms to compete but also to collaborate where necessary, for instance on issues that are important to help develop the industry further. ”

The investment migration industry is currently under extreme pressure, with potential tax evasion, security threats and money laundering often being cited by the industry’s critics. We have set up highly regulated investment funds in key markets that our clients like to invest in, such as Ireland, the UK, Malta, Cyprus and Portugal. This means our clients are subject to financial regulation and have gone through the most stringent due diligence and KYC processes. We are also the majority shareholder of a European banking institution, which gives us the additional opportunity to offer private banking and wealth management services to our clients. Apart from that, we have established a think tank, the Future Citizen Institute, which produces research and analysis related to investment migration. We would like to see the institute evolve into a strong


INVESTMENT MIGRATION YEARBOOK 2019/2020

knowledge partner for all stakeholders in the investment migration industry. I believe in an environment that allows firms to compete but also to collaborate where necessary, for instance on issues that are important to help develop the industry further. We need to come together and support the main industry organisations so that we speak with one voice.

bad practice, and it is our responsibility to clean up the industry. We need to make sure that all players adhere to ethical standards and professional behaviour at all times. Organisations that do not follow these rules should be ostracised. We, as the industry, also need to learn to work together effectively and prioritise long-term benefits over short-term gains. After all, it is our reputation that needs to be safeguarded, and I am pretty sure that companies that will continue to prioritise short-term gains over long-term benefits will fall by the wayside.

How would you describe the state of the investment migration industry at the moment?

The industry is at a pivotal moment in its young history. The sector has matured and professionalised quite a bit during the past three years, yet the case for collaboration is stronger than ever given the increased scrutiny from international institutions such as the EU and the OECD, policy-makers and the general public. The industry is now entering the shakeout period. Consolidation will be inevitable as the industry moves towards increased levels of regulation, be it in the form of government regulation or self-regulation. The key players in the marketplace are clearly supporting this direction, but this will create an environment in which smaller firms might struggle to survive. What are the top three challenges that the industry is facing?

The main challenges relate to industry reputation and trust. Many people dislike the concept of investment migration from an emotional mindset. The post-Brexit Irish passport boom is a good example of this issue. Recently, Ireland has received some 200,000 citizenship applications from UK nationals of Irish heritage, and in fact there are around 6.7 million people in the UK who are eligible for Irish citizenship. I think it is fair to say that the majority of these people don’t have a real interest in Ireland. They will most likely not visit Ireland and neither will they invest in the country. However, the public at large has no problem with the fact that record numbers of Britons are now seeking Irish passports. On the other hand, when migration of high-net-worth individuals is talked about, the narrative is rarely positive, despite these people contributing enormously to the economy. This brings me to the third challenge: We have to get to the stage where the EU has a realistic view of the industry. The recent reports from the European Commission and the European Parliament both reflect a lack of understanding of how the investment migration industry operates and what economic benefits and value it brings to countries. The EU has to be open to hear the positive side of the industry. What do you think programme regulators and the industry need to do to restore public trust and set the record straight?

We cannot deny that there have been instances of

So is the answer to the current situation to encourage the EU to take a more central role and oversee the industry, similar to the EU’s supervision of the banking sector?

Martin O’Connor is the CEO of Kylin Prime Group. Highly experienced in international affairs and organisational development, he has worked in complex business, political and regulatory environments. He has led teams involved in mergers, JVs and partnerships, and coached executives from the world’s leading brands.

The EU is very clear in saying that the granting of citizenship and residence are national rights, and I don’t think the EU is interested in supervising the sector directly. At the moment, we are seeing that sensationalist rhetoric is shaping the debate. Investment migration is a multi-billion euro industry. It involves investment that can bring huge benefits to society and economies and also involves people’s rights. Security  issues,  financial crime and tax evasion seem to be areas of concern for the EU. Our industry has to be responsible in these areas but the EU, as well as the OECD, also need to be responsible in their pronouncements and intentions and not stymie something that can be so beneficial all around. It works both ways. What are the big trends in the industry that you are noticing at the moment?

From the clients’ side, we are seeing a growing need for an all-encompassing investment and RCBI journey. For many ultra-high-net-worth and high-net-worth individuals, diversification of assets is the top priority, and they are interested in more than just getting a visa. The other trend is that we are seeing more programmes being introduced, and I expect this number will only increase in the coming years, as more governments recognise the benefits that countries with programmes reap. What’s your future outlook for the next five to ten years?

If we can overcome the current issues and build a sustainable investment migration industry, the industry can become hugely beneficial, not just commercially to the companies involved in this sector but also for global society. I am convinced that the sector can be a catalyst for global growth and an evolution towards future citizens. Investment migration has the chance to help shape our future societies, redefine global mobility and reposition our understanding of where we are from in favour of a more fluid concept. n

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Prof. Dr. Dimitry Kochenov - Chairman of the board of the Investment Migration Council

Investor Citizenship and the EU:

Zooming in

on the European Commission’s ill-Informed Analysis

The European Commission has no competence to regulate, and a rather poor understanding of citizenship matters and the investment migration industry, writes Dimitry Kochenov, Professor of EU Constitutional Law in Groningen, and Chairman of the IMC. 40

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n January 2019, the European Commission released its much awaited ‘Report on Investor Citizenship and Residence Schemes in the European Union’. Given the negative attention the whole issue of selling EU citizenship and residence has been receiving from the powers that be in the European Union, lawyers and policy-makers could expect much more from the Commission’s treatment of this hugely important topic. Rather than providing a clear rulebased analysis of the potential problems and opportunities at hand, the Report, regrettably, turns against the key achievements of the Union to misrepresent EU citizenship law. Instead of measured and careful analysis, it offers an outline of a moral panic, ignoring all the positive sides and inflating the negative sides of the story, while proceeding on the false premises of archaic nationalism and ignorance of EU law. Infinitely more could be expected of the Commission, and

one can only hope that this first erroneous step will not set a trend. The Report is correct on many facts it communicates: indeed, Bulgaria, Cyprus, Malta and, less systematically Austria, offer EU citizenship for investment. Moreover, 20 or more member states offer (permanent) residence statuses for investment, which are often convertible into citizenship of those states. To summarise: more than 70% of the member states opted for a policy, which the Commission has no direct competence to regulate, but tackles in the Report. This alone makes the Commission’s take on investment migration worth looking at in some detail. Framing investment migration

Undoubtedly, there is a fundamentally important issue at hand: investment migration is capable of bringing huge gains, but also generates risks. The Commission is dead silent on the former, but is absolutely right about mentioning the latter.


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“The Commission’s analysis seems to be based on the assumption, which is nowhere explained or defended properly, that presence in one of the member states for a period of time before naturalisation, is likely to alleviate security risks.” When run in non-transparent and corrupt ways, investment migration – like any other enterprise – will certainly generate problems. In fact, the Report is such that it presents the whole issue of investment migration uniquely as a risk, rather than an opportunity. Silence on the benefits that the overwhelming majority of the member states either receives or believes to be receiving, unquestionably sheds the Commission’s work in a deeply biased light: the suggestion is that 20 member states are behaving deeply irrationally, which is implausible, and deeply political in the negative sense of the word. A hymn to a nationalist past

The Commission claims to have discovered what citizenship is about, writing that citizenship ‘is traditionally based on … ius sanguinis and … ius soli’. This is all correct, but the Commission does not make clear that a) it does not have the power

to regulate this area; b) that the reality is much more complex than what its selective summary purports to demonstrate. Referring to citizenship by investment, the Commission writes that, in essence, such ‘citizenship is granted under less stringent conditions than under ordinary naturalisation regimes’. What is crucial here is to mention the differences marking citizenship law amongst all the member states to rationally accommodate the acquisition of citizenship by different categories of applicants. The sovereignty aspect of this story is also important. Starting with the latter, states are free to confer citizenship on those whom they consider qualified under the Hague Convention of Nationality (Art. 1) and, unquestionably, under EU law. EU law is funny in a way – and this is its unquestionable, pluralist strength. A US kid able to find a Greek great-great grandfather becomes an EU citizen automatically, without ever having visited Greece; a spouse of a Frenchman in Vietnam is naturalised without ever having lived in France; an EU citizen does not need to give up his or her original nationality when naturalising in Germany, unlike any non-EU nationality holder; and a Catholic dignitary retiring from the Vatican becomes an Italian, automatically and immediately. These are the groups (among, literally, countless others) that are treated by immigration and citizenship law differently in all member states. The question of what is ‘legal’ does not arise, since it is not up to the Commission to ask or comment upon. And given that international law, similarly to European Law, is clear: Member states will decide as they see fit – ius soli and ius sanguinis in this context, is, while not incorrect, a reference to nowhere. The Commission simply misrepresents the complexity of standing citizenship law and policy to mount an assault on the investment migration industry. Besides, and equally importantly, ‘ordinary conditions’ – as opposed to the frowned-upon ‘less stringent’ ones – imply a level of due dili-

Prof. Dr. Dimitry Kochenov chairs the board of the Investment Migration Council. He holds a Chair for EU Constitutional and Citizenship Law at the University of Groningen, Netherlands. His research focuses on European citizenship and the principles of European Union law, with an emphasis on justice, democracy and the Rule of Law. His latest books include ‘EU Citizenship and Federalism: The Role of Rights’ and ‘Europe’s Justice Deficit?’ His newest monograph is ‘Citizenship’, forthcoming from MIT Press in the summer of 2019. Dimitry is a consultant for governments and international organisations in his fields of interest, and is also co-creator, with Christian Kälin, of the Quality of Nationality Index.

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it, and taking into account the reasoning of the Commission, trying to undermine the internal market, established case-law on free movement of persons, and the rule of EU law established in Micheletti amounts, in fact, to the Commission knowingly misleading the European Parliament, the Council, the European Economic and Social Committee, and the Committee of Regions, to whom the Report is addressed. This could be an example of the violation of the duty of loyalty, should the Report be more convincing.

gence, which is significantly lower than what investment citizenship promises: the entirety of one’s finances and business connections, as well as all the story of your past, would not normally be dug up by independent due diligence providers, unless you are an investor naturalising on that ground. This is only right: different applicants require different standards. The ‘context’ of citizenship acquisition, to which the Commission dedicated a whole section in its Report, is misleading: forgetting to mention ‘difference’ amounts to failing to tell a true story.

Curious assumptions about the connection between residence, citizenship and security

Flawed reasoning rooted in obsolete authority

The second main flaw of the Report is its failure to come to terms with the basic meaning of citizenship in law as an abstract legal status. Not caring about the country and its purported values will not make you less of a citizen in the eyes of the law, just as caring a lot about some officially endorsed ‘culture’ or language will not make you a citizen, unless you are named such by law. Pretending that this is not the case is deeply unhelpful. When the Commission informs us that ‘the study looked for other factors … which might arguably create a link between the applicant for citizenship and the country concerned’, a citizenship lawyer reading it is puzzled. It is fundamental to realise that only citizenship can be such a link. A Tanzanian, who spent his whole life in the US and loves America, is still a Tanzanian unless US law tells us otherwise. And an American who spent his whole life in the UK – like the UK’s Boris Johnson – is still an American, liable to pay taxes and to renew his passport, no matter how little he thinks of the greedy motherland. The whole point of the text of the Report is the Commission’s apparent desire to play a somewhat totalitarian role: is this Maltese a ‘real’ Maltese? What if he has never visited the European Union? This is where the obsolete case-law of the International Court of Justice, expressly overruled by the EU’s own Court of Justice (!), comes into play: the Commission refers, quite extensively, to Nottebohm’s theory of ‘genuine links’. What the Commission’s file handlers should have not overlooked, however, is that ‘genuine links’ are incompatible with a world which is not composed of ‘genuine jails’: what the Court of Justice confirmed in Micheletti: as per Advocate General Tesauro, the ‘romantic period of international law’ is over. The Court of Justice of the European Union has expressly prohibited member states from relying on Nottebohm in dealing with each other’s nationals. References to the obsolete authority are only the start of the Commission’s puzzling campaign of putting legal reasoning to sleep. The Report essentially claims that since checking genuine links is expressly prohibited by EU law in Micheletti, member states have to ensure that such links exist. Given that Nottebohm unquestionably is bad law and the Commission was obliged to know 42

“The Commission has been effectively telling 20 member states that most likely, they are doing it wrong, while enjoying no competence to regulate the field, and demonstrating rather poor command of the matter in question.”

In the Report the Commission is looking for solutions to address the risks in terms of security, tax evasion and money laundering – all vitally relevant concerns of huge importance for the EU and the member states. In so doing, however, the Report, instead of outlining concrete problems and proposing solutions, reaches a truly esoteric level: the Commission’s analysis seems to be based on the assumption, which is nowhere explained or defended properly, that presence in one of the member states for a period of time before naturalisation is likely to alleviate security risks. In fact, numerous recent security threats in the EU were caused by first- or second-generation EU citizens who never claimed to be jetsetters or millionaires. This also undermines the appeal of the Commission’s findings akin to ‘this means that applicants can acquire citizenship of Bulgaria, Cyprus, or Malta – and hence EU citizenship – without ever having resided in practice in the member state’. The only answer is ‘Of course!’ in a situation where hundreds of thousands of EU citizens have never been to the EU in their lives, and there is no legal requirement, either in EU or in International law, to bother to visit one’s country of citizenship. A passport can also be renewed from abroad, as the Court of Justice has reconfirmed in Tjebbes, reinforcing the point that the member states, not the EU, will be deciding on the issues of conferral and withdrawal of nationality. Conclusions

The Commission has been effectively telling 20 member states that most likely, they are doing it wrong, while enjoying no competence to regulate the field, and demonstrating rather poor command of the matter in question. Many will no doubt be offended by it, while blood and soil communitarians of all sorts will cheer. Beyond the haphazard argumentation and wilful misinformation concerning citizenship in general and EU citizenship law in particular, the Report sends a very clear message: the Commission wants to regulate citizenship. Ideology and incompetence have won for now, and citizenship lawyers and scholars in all the member states will need to mobilise to shame the Commission for failing to do its job to make sure the Report in question is an exception, rather than the rule. n


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INVESTMENT MIGRATION YEARBOOK 2019/2020

Trends & Topics

2O19/2O2O We run through the stories that mattered the most over the past year and explore what will likely shape the investment migration industry in 2019 and beyond.

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The Good News

The maturing of the investment migration industry is a cause for celebration. The

industry is powering ahead and seeing positive momentum with an increasing number of programmes coming online, rising client interest and a wide array of new products that are being launched. The growth of consulting firms expanding their service offering to include investment migration is broadening the industry’s reach and equally upgrading it to a whole new level of professionalism. This is all cumulating in a feel-good factor that has all the ingredients for boom times ahead.

Stability & Predictability

The investment migration industry needs to embed certainty, predictability and stability in its investment environment, whereby the need for predictability is not a need for guarantees. Major shifts in the investment amounts required by programmes, U-turns in policy by governments, opaque guidance notices by programme regulators and vague assurances by agents are only some of the latest examples of the shifting sands that customers must contend with. Uncertainty inhibits long-term investments. Regulators are responsible for providing a stable and predictable regulatory environment, in which investors, agents, and customers can make long-term decisions with confidence that short-term political goals will not impact them or their families. A  stable investment environment that offers simplicity, stability and predictability needs to be at the heart of everyone’s focus. 

The Great Divide

With as many as 100 countries operating investment migration programmes, and still an ever-growing number of countries entering the space, it appears the appeal of the industry to governments around the world is far from waning. The most recent additions of Turkey, Jordan and Moldova are part of a growing wave of entrants who are carving out new niches in the market. In addition, Montenegro will soon join the line-up. While some programmes have global appeal, others are positioning themselves as regional hubs attracting applicants on the basis of cultural affinity, effectively creating viable micro-markets. The minimum investment required by programmes today ranges from $100,000 to more than $5 million, with the more expensive programmes appealing to ultra-high-net-worth individuals while the more affordable products remain attractive to high-net-worth and mass affluent clients. Market segmentation is becoming crucial for the industry as it progressively moves away from its onesize-fits all approach. Customers today have more options, and their choice is being influenced by their net worth as well as their geographical and generational preferences. 

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Moldova

TURKEY

JORDAN

Bullish on Blockchain Many hail blockchain technology as the best innovation since the invention of the internet. Blockchain technology has become one of the hottest topics within the industry, and many agree that the blockchain tech revolution has only just begun. More than just a distributed database for bitcoin, the technology’s ability to send, receive and store information has the underlying power to truly disrupt the status quo of the investment migration industry in the years ahead. The implications of decentralised ledger technology mean the industry could address a myriad of transparency issues and completely redesign its KYC and due diligence processes. While the technology is in its early days, it still offers a myriad of technological solutions for the industry. Regulatory compliance, instant payments, identity verification, and fraud detection, are just the tip of the iceberg; and we can expect further applications that can be implemented across the entire business operation to come online in 2019 and beyond.


INVESTMENT MIGRATION YEARBOOK 2019/2020

80/20 – The China Factor

80/20, or the law of the vital few, is an interesting rule to apply to the investment migration industry. Chinese nationals account for roughly 80% of all applicants to any residence programme, with the remaining 20% coming from the rest of the world. But a source of strength can also be a source of vulnerability, and the over-reliance on the Chinese market appears to be the biggest single threat to the industry. The industry’s fortunes grow and shrink with China. A simple shift or change in China’s economic policy that would lead to lower demand for investment migration products could significantly impact the industry practically overnight. Making inroads to opportunity-rich source markets such as the BRICS and N11, which include  Brazil, Russia, India, China, South Africa, Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea and Vietnam, which are all enjoying a level of economic resurgence, becomes key. Diversification is now the name of the game for both programmes and agents.

The Birth of the

Hybrid Programme  

The big news on the product development front is the rise of entrepreneur and start-up visa programmes as an alternative to the golden visa route.

Some feel that entrepreneur and start-up visa programmes are more politically palatable than the conventional residenceby-investment programmes. However, whether or not this new generation of programmes will be the Holy Grail for the industry seems to be uncertain. The success of any programme largely depends on whether agents and service providers are promoting it. Some commentators believe that the extra time and expense required to validate a client’s business idea and develop a custom-built business plan are not making these programmes attractive enough for consultancy firms to put their full weight behind them. Besides, experience from the past has shown that most wealthy investors prefer a form of passive investment that does not require them to be personally involved in managing their investment. The solution could be the development of hybrid models that match a highnet-worth-individual’s capital with local start-ups requiring funding. The investment route can be a direct investment into a company, regulated loan funds or a national angel investor platform. The USA’s EB-5 programme, which matches foreign investors with local projects, proves that this model can work. 

Impact Investing

Impact investing may just be a trend to some or, quite possibly, the best strategy to not only improve the world but also attract investors. The concept is that your investment should be both socially beneficial and have a positive environmental impact while also making a financial return. The concept fits nicely with the overarching goals of the investment migration industry, and for countries willing to embrace the transformational change of moving to a sustainable circular economy, it offers the opportunity to capture the attention of like-minded investors. The growing relevance of sustainability is only going to increase in importance in the years ahead and could well play a more significant role in people’s choice for a residence or a citizenship programme. 

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The Demand for Absolute

Transparency

The calls for absolute transparency are louder than ever. Media and international watchdogs demand that

programme agencies are fully transparent on how they run their programmes and publish the details of approved applicants as well as the number of refusals and the reasons for denial. Transparency is now the name of the game that programmes will have to grapple with over the next few years. The industry will need to cooperate closer with international organisations and law enforcement agencies to ensure that the industry remains free from criminality. Transparency has become the most pressing issue for everyone with a vested interest in protecting the integrity of the programmes. In the spirit of “sharing is caring”, programme agencies should also consider a greater exchange of information on applicants and inform each other of rejected applicants. These measures would send a strong signal that countries operating visa and citizenship programmes are taking the security concerns of their international partners seriously. Being rejected by one programme and turning up as a newly minted citizen of another programme does nobody any favours.

The Genuine Link

The genuine link is a topic that provokes much conversation and philosophical debate when it comes to the issue of investment migration and acquiring citizenship in particular. Critics of the

industry are increasingly probing and challenging what genuine link or connection investment migration applicants have with the countries of which they are seeking citizenship. Supporters of citizenship programmes counter with the argument that citizenship of a country in and of itself is the ultimate expression and link between the individual and the state. While our more learned friends may to-and-fro on the argument, global policy-makers and the public at large are less concerned about the philosophical argument and are more grounded in what they perceive as a real genuine link with their country. The investment and acquisition of citizenship has to be seen as just the beginning of the journey and not the end of a process for all. Attracting the best and the brightest is an expensive endeavour for all involved and comes with a considerable investment in time and recourses. Countries need to think more creatively how they are going to harness the power and influence of these individuals beyond the relatively short-term investment gain. Like all relationships, you only get out of it what you put in, and cultivating that relationship requires countries and programmes to maintain a physical connection with what could be roving global ambassadors for their adopted country. Countries need to conceive new ways to maintain the connection and employ the skills and networks of this elite group of people for the further development of their country. Investing in national networking gatherings with your new citizens might just pay off more handsomely than the initial investment.  

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A Growing List of Services There is a significant opportunity for countries to expand their service offerings to investment migration applicants.

These countries are in a very privileged situation, attracting large numbers of the world’s wealth creators who, like all time-poor executives and captains of industry, often have a need for professional and personal lifestyle services. The development of specialist products supporting both the commercial and personal lives of these individuals, in areas such as wealth management, legal, financial, consulting, advisory, insurance and healthcare, could have a longer-term economic impact on countries than investment migration programmes in and of themselves.


INVESTMENT MIGRATION YEARBOOK 2019/2020

Data is King

A Top-Priority Investment

You can’t do things better if you are not measuring them.

The crux for the investment migration industry is the lack of trusted data to aid and guide decision-making. To expand the research capabilities of the industry, advisory firms, regulators and policymakers need to champion a partnership model for funding and producing research on the investment migration industry. Creating an investment migration innovation fund to attract scientists, researchers, academics and industry professionals interested in conducting studies would be a major step in the right direction. Industry stakeholders currently suffer from poor visibility due to insufficient data insight, ineffective data sharing and poor cross-industry collaboration. However, there is a recognition, particularly among industry leaders, that data access and information sharing is important to guide policy-making and improve decision-making so that the sector can deal with upcoming issues in a more constructive manner. Though many point out that the industry being “slow to change” was one the biggest roadblocks to improving collaboration in the first place. To provide the level of trust and gravitas that would be required to get the buy-in from the industry, a Big 4 consulting firm with a  footprint in all relevant markets and programme jurisdictions could be the central point for data collection, the analysis of that information and the dissemination of the findings. This would allow the industry to take decisions based on trusted data and aid in the establishment of key performance indicators for the industry.

Taking the Search out of Research Artificial Intelligence (AI) and Machine Learning (ML) are game-changers in due diligence. The advances in machine learning techniques

now provide the ability for AI to manage large volumes of data and detect fraudulent behaviour automatically. AI-enabled solutions support modern KYC practices, resulting in better risk analysis and assessment of potential new applicants. In a manual process, high volumes of data, false positives and duplicate documents create an enormous strain on time and budget. For programmes and agents, artificial intelligence saves time in pre-screening and allows for smart, risk-based monitoring of applicants. It accelerates the research process and classifies risk, allowing the researcher to delve into the analysis of the findings. Recent research found that in the nottoo-distant future clients will expect their first interaction with a professional services company to be via a device, turning the current ‘people first’ and ‘technology second’ strategy on its head. AI chatbots are already the first interaction many clients will have with companies and this trend is already appearing in the business models of the most recent entrants to the sector.

The number of cyberattacks has grown steadily during the last few years. Adobe, Sony,

Target, HSBC and Marriott Hotels are just some of the household names that suffered high-profile hacks where the attackers walked away with sensitive personal and financial information. John Chambers, the former CEO of Cisco, summarised it this way: “There are two types of companies: those who have been hacked, and those who don’t yet know they have been hacked.” Investment migration programmes hold a lot of sensitive information on individuals. While programmes might wish to guarantee a high level of privacy when it comes to sharing the names of individuals who obtain citizenship and visa programme approval, applicants, their advisers and governments need to be aware that this is a very difficult task given the very real possibility of data theft and hacking scandals. In order to mitigate this risk, cybersecurity and encryption need to be among the top priorities of all investment migration programmes.

Mixing up the Marketing

Word-of-mouth and customer referral reign supreme and are still some of the biggest influences on buyers. The investment migration industry has, to a

large extent, remained loyal to what has been tried and tested over the years: networking events, conferences, exhibitions and the sponsorship of sporting and cultural events, along with some appearances in influential traditional media titles. The model has proven its worth in developing relationships with advisory firms that refer clients. Commission agents, especially in China and India, have completed the marketing mix. With competition heating up, increasing numbers of programmes and a near explosion of advisory firms and agents plying for new business, a competitive intensity is creeping into the marketing of the industry. While positive in that it is creating wider awareness, some of the marketing practices can be reputationally harmful and, at best, misleading. This is something the industry needs to rein in before it becomes an issue. As the industry is seeking to attract new client groups and appeal to a younger audience – the catchword here is millennials – a broader marketing mix will come into play, including affiliate platforms and influencer marketing. Programmes, concessionaires, referral agents and their new marketing partners will need to pay particular attention to the advertising and promotion campaigns that they are running in countries across the world so that they don’t fall afoul of the local regulations that are being increasingly enacted and enforced by consumer protection authorities.

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Everyone Needs an Affiliate

Affiliates will be a relatively new marketing term to the investment migration industry but one that it will increasingly embrace over the next five years as the sector becomes more digital in its marketing to the mass affluent, wealthy millennials and high-net-worth digital natives. Affiliates operate in

the world of performance marketing, where they only get paid if and when a lead or sale is delivered to the company. For this, they typically earn a high referral fee and/or a revenue share on the fees charged to the client. This segment of the marketing world is booming and can account for more than 50% of revenue generated in some industries. The concept of embracing affiliate marketing has been slow to penetrate the investment migration industry, but as advisory firms and agents expand operations into new territories and markets the ability of master marketers such as affiliates with local on-the-ground knowledge and the ability to deploy rapid native content marketing campaigns will be hard to match. While all that glitters is not gold, affiliate marketing comes with its own challenges and pitfalls. Any firm aiming to embark on this journey will need to have a firm grip on advertising compliance requirements in all markets they target.

The Compliant Marketer Marketing compliance, advertising rules and data protection are taking on a greater significance for all firms today.

The global nature of the investment migration industry makes it particularly prone to potentially violating rules and regulations without even being aware of it. Regulators and consumer protection authorities are increasingly holding companies responsible for the actions of anyone who is referring business to them. The fines in countries like the UK are not to be sniffed at, as recent fines have run into many millions of pounds. Marketing and advertising are set to become hot topics, as the industry more readily adopts mainstream marketing channels such as TV, print, billboards, online display adverting, social media, content marketing, influencer marketing, performance and affiliate marketing channels. The marketing and advertising regulatory landscape is still in flux and changes frequently. As the industry increasingly moves out of its comfort zone, this is an area that management will need to pay particular attention to.

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AML & GDPR

Anti-Money Laundering (AML) and General Data Protection Regulation (GDPR) are two unlikely bedfellows that have been making their way into the boardrooms and onto the agenda of the industry’s executive decision-makers.

Given the severe consequences of failing to comply with AML obligations, coupled with the vast fines (up to €20 million or 4% of a company’s total worldwide turnover) that could follow any failure to comply with GDPR rules, it’s no wonder executives beyond the compliance departments are grappling with how to meet what, at first glance, would appear to be contradictory in nature. AML laws place an obligation on entities to carry out due diligence, and in doing so collect and process personal data. In contrast, the EU’s GDPR seeks to limit the personal data collected and processed. Countering money laundering was initially seen as far more important than protecting an individual’s privacy even if this meant trumping data protection rules. The new thinking by regulators is more cooperative and now obliges advisory firms to consider AML and GDPR requirements as complementary to each other and not mutually exclusive. Companies will now be required to take a more risk-based approach and prove that their policies and procedures for data collection and retention are appropriate to any potential risk posed by the customer.


INVESTMENT MIGRATION YEARBOOK 2019/2020

Grow Big or Go Home "As seen in other industries, commoditisation of the investment migration market is bringing prices down both for the services providers and the country programmes. Therefore, we can expect some firms to consolidate over the next one to five years, while others will expand their service offering to offer more products and services to the same client.” Eric Major CEO of Latitude Consultancy Limited

While many are feeling that the industry is ripe for consolidation, M&A activity hasn’t gained any real momentum. While

there is an appetite by the top tier firms to play a role in consolidating the fragmented industry, there seems to be less of a desire by the smaller mid-tier firms to be acquired. However, many believe it is only a matter of time until deal-making will pick up due to rising compliance and operational costs that might drive smaller firms, staffed by just a few people, to the wall. Firms either need to scale up significantly to ensure proper compliance or join forces to achieve economies of scale to compensate for rising operational costs. Another factor that is expected to play a role in driving consolidation is the desire by larger players to continuously enter emerging markets, coupled with rising customer expectations that firms handling their visa or citizenship applications have a presence in their home and in their chosen country to ensure a smooth process and positive customer experience. An increasingly global footprint, or at least a strong presence in selected source and programme markets, will become increasingly important for service providers to survive and thrive under the new conditions.

Doing Good is Good Business

The positive impact of the investment migration industry is very rarely reported, with the result that the industry has an image problem. While the industry has been responsible for underpinning struggling economies in a time of need or has been the catalyst for job creation, building roads and hospitals as well as providing infrastructure to support countries and their citizens to develop and thrive, much of this remains unseen by those who oppose the concept of investment migration. This image issue will not disappear until the industry embarks on a comprehensive outreach campaign and genuinely engages the sincere concerns that the media, governments and international institutions have with the investment migration industry. To be seen as good, one actually needs to do good. The industry needs to consider some bold moves beyond facilitating investment flows and show how the industry and its customers can positively impact society and the environment globally. This could be in the form of an industrywide philanthropic initiative, a redistribution tax on the industry or organising a global gathering of investment migration applicants where investors, countries and NGOs who require funding could be matched with investors. Remember: people prefer to do business with an industry that has a higher purpose.

Taxing Times

Tax is an issue that is not exclusive to the investment migration industry; however, it has never been as high-profile a topic as it is today as a result of the global push towards more tax transparency, the call for the reduction of preferential measures and the introduction of information sharing and common reporting standards.

Although investor visas and citizenship are not the deciding factor when it comes to determining a person’s tax status, in some quarters the investment migration industry has been singled out as a potential avenue for tax avoidance, fraud and other nefarious activities. While it is not beyond the realm of possibilities that some clever scheme or structure could be used to avoid tax, professionals point out that there are far easier routes than investment migration. Nevertheless, the industry will need to prove that it is complying with all international rules that have become the new standard. On top of that, it needs to take into consideration the expectations of the media and the general public that the wealthy are paying their “fair share”. Investment migration professionals will need to become a lot more tax-savvy to advise and inform their clients of any possible tax implications. Given the fact that it is predominantly wealthy individuals who are using investment migration programmes, in the minds of many it will be a case of ‘guilty until proven innocent’. Something the industry needs to watch out for is the possible inclusion of property as reportable capital under the Common Reporting Standard. Many experts believe that it won’t be long before this asset class will also become subject to the rules. The EU, the OECD and the IMF are all paying close attention to the industry’s response to this new tax reality, reinforcing the need for the industry to urgently establish a global standard-setting body that can work with fellow governments and international organisations to create a framework that would prevent the industry being used for tax evasion purposes. 51

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Finding and Retaining the Right Talent Given the exponential growth of the investment migration industry, talent development should be high on the priority list of government agencies and programme managers. Professionals have such a

variety of options to choose from, which means companies need to be clear and transparent of what they offer as an employer. Salaries and benefits are not the top drivers of employee loyalty; the real winners of the global “war for talent” are those employers who can offer an environment created for personal growth and development. While the focus should be less on hiring large volumes of candidates, the goal should be to attract and retain top-tier talent from global institutions, regulatory bodies and corporations, whose profiles and track records will add instant credibility.

Crypto Payments

Cryptocurrencies are slowly but surely continuing their journey towards mainstream acceptance. Even regulators

and financial institutions that once viewed them a taboo subject are awakening to the opportunity cryptocurrencies can offer them and their industry. The investment migration industry is one that could benefit considerably from this new embrace. While most programmes do not allow applicants to pay for investments or contributions with cryptocurrencies, a select few are breaking new ground and have either added them to the payment mix or are considering doing so. Dubai, Sweden and Turkey are three countries that are close to having a central bank-issued digital currency (CBDC) or digital fiat money. More and more countries are bringing in regulations for virtual currencies and tokens, and it is quite conceivable this may be the payment method of choice for investment migration in the not too distant future. With the number of cryptocurrency millionaires and billionaires on the rise, this payment method could attract a very viable group of individuals that countries may wish to attract to their programmes.

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Due Diligence – an Evolving Discipline

The investment migration industry does a greater level of in-depth background checks than other industries, including having people on-the-ground confirming that the provided information is correct.

Though the banking sector is often being held up as the standard that the industry needs to attain, the reality is that in many cases the investment migration sector is much further ahead. While the vast majority of people choosing the investment migration route are law-abiding and respected individuals, no programme is completely foolproof or watertight. Neither can it predict the future behaviour of its new citizens. Due diligence service providers are increasingly employing ongoing monitoring solutions after the initial due diligence check has been carried out to ensure no black spot remains undiscovered. Periodic look-backs by both programmes and professional service providers at a person’s behaviour even after his or her visa or citizenship has been approved would also ensure that those individuals are not abusing their new rights and that a programme’s integrity is maintained. In order to ensure future success, programmes will need to continuously keep pushing the boundaries and remain at the forefront of due diligence innovation to give comfort to both the industry’s partners and its external stakeholders.

A Sheriff for the Industry

The regulation of agents and service providers, along with consumer protection, will surely be a topic that will feature high on the agenda in the coming year in the wake of a series of scandals ranging from the misappropriation of client funds to investments in property projects that never materialised. In some countries, Canada being an example, service providers are regulated, while many other countries require agents to register. However, a pan-industry regulatory body does not exist, and countryspecific regulators often lack enforcement power. Regulations for agents, whether in the form of self or government regulations, would go a long way towards achieving higher consumer protection standards, which are becoming ever more important as the industry starts servicing clients of more modest means who often spend a significant share of their savings on a residence and citizenship programme. Investment migration, like many other industries, needs a regulator with teeth and a willingness to bite.


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Banking & Payments

The tightening of US banking regulations has seen international correspondent banks recoil from a host of countries and sectors as they de-risk their operations to avoid any costly regulatory issues or accusations over fraud and money laundering. The US-imposed regulations have rippled

through the entire global banking network. While banks may all have their own customer risk profiles, they are now obliged to apply the risk profiles of their international banking network partners. The more stringent rules have unfortunately impaired many countries’ banking systems and rendered some countries virtually bankless and in search of new alternatives. Enhanced substance requirements and an aversion to processing anything that might attract a hint of controversy are the main concerns of the banking industry, and according to many, these are already having an impact on countries operating investment migration programmes. Banks cite uncertainties about regulatory compliance and KYC procedures as among the main reasons for cutting back their correspondent relationships, with the result being that entire economies and regions are excluded from the global financial marketplace. However, on the positive side, digital disruption is accelerating. Cryptocurrencies, despite being controversial, and the arrival of central bank-issued digital currency (CBDC) or digital fiat money are opening up new avenues for the industry to process transactions. Payment providers are increasingly developing their own connections that enable them to bypass the traditional correspondentbanking infrastructure. These developments promise to cut costs and speed up processing times for transactions. They also present an opportunity for investment migration host countries and entire regions to forge new partnerships and create alternative avenues for cross-border payments.

Next Stop: Nation As a Service The investment migration industry, with the opening up of residence and citizenship by investment, was most probably the first real step in the manifestation and realisation of the concept of nation as a service.

Estonia’s e-Residency programme, although coming from a slightly different angle, is very much in tune with this idea. The true global citizen has become a reality with the emergence of digital nomads, industrial tycoons, high-net-worth individuals, globetrotting professionals and consultants, as well as bitcoin billionaires who are reshaping and redefining the citizenship concept. New ideas like nation as a service and fractional citizenship, where users adopt a pay-as-you-go subscription model for access to state services, are gaining ground as countries try to attract the skills and taxes of the globally mobile. This has opened up a new opportunity for the investment migration industry to start providing value-added services and solutions to support those global citizens in their international work commitments and lifestyles. Greater substance demands on applicants also mean countries need to start upgrading their offering by providing more services in areas such as wealth management, legal, financial, consulting, advisory insurance and healthcare, to develop a more robust genuine link even if these services, like the Estonian model, are virtual. The model is slowly being proven and is certainly one to watch; we could be seeing some exciting developments on the horizon as more countries start to bring their concepts to this working idea. While the Estonians have brought the virtual element to the table, and the investment migration industry has brought the physical element, the question is who will be the first to marry these two elements and deliver a great jump forward in the investment migration model.

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INVESTMENT MIGRATION YEARBOOK 2019/2020

Yakof Agius, Founder and CEO of CiviQuo

The Power of

Transparency CiviQuo is one of the investment migration industry’s most recent start-ups. It aims to radically change the way the industry promotes itself by bringing in elements of performance marketing and building up an affiliate network. The wider goal though, is to bring a whole new level of transparency to the investment migration industry, says Yakof Agius, CEO and Founder of CiviQuo.

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INVESTMENT MIGRATION YEARBOOK 2019/2020

Can you briefly introduce CiviQuo?

CiviQuo is the world’s first residency and citizenship by investment e-marketplace. The platform brings together a large selection of programmes, licensed agents, and intermediaries from around the world, enabling each to showcase their offering in a very simple, transparent, and straightforward manner. Individuals interested in RCBI programmes do not need to browse through many different sites to find relevant information, but can use CiviQuo as a resource to find information on programmes and service providers. A key feature of CiviQuo is that service providers who feature on the website need to disclose the professional fees they will be charging. Clients can also rate the service provider they’ve used. The idea behind all this is to introduce a new transparent formula that will ease the process for our clients, and transform the way agents, and the industry at large, market themselves. How did CiviQuo come to be and who’s behind the project?

I have spent almost five years working in the investment migration industry, and at one point, I got the idea to create something similar to what booking.com is for the hotel industry, for the investment migration industry. The investment migration industry has traditionally followed a very conservative marketing approach, with professional advisers, intermediaries, and introducers playing a key role in acquiring new clients. Thus far, performance marketing has not really been utilised in this industry, but I believe it is the future. I pitched the idea to my long-time business partner and co-founder, Ryan Darmanin, and together we developed the concept. Just as booking. com has changed the way we pick hotels, flights, and holidays to destinations worldwide, CiviQuo now aims to help clients source information and connect them with different service providers. How exactly do you connect service providers and clients, and how do you approach the area of KYC and due diligence?

Once a client has selected a programme from the website, he or she will be able to view the different service providers and their prices. In the next stage, the applicant can then select a service provider. This stage is key, because clients are expected to input basic details which will allow service providers to undertake a good level of due diligence. We are aware that every agent will have its own customer acceptance policy, while the level of due diligence that is undertaken could

“The platform brings together a large selection of programmes, licensed agents, and intermediaries from around the world, enabling each to showcase their offering in a very simple, transparent, and straightforward manner.”

also vary by jurisdiction. We have developed a standardised model for service providers to work with, and have also gone the extra mile by providing them the tools to be able to effectively undertake due diligence. Exiger’s DDIQ is a built-in feature of the website, and service providers can either use their own subscription to access it, or use it on a pay-per-use basis. Agents that usually use another company’s tools can also do so, but they need to confirm that they are assuming the responsibility for it. Once the applicant has submitted all the information, the service provider receives the details and can choose whether to accept the client or not. Basically, we are bringing the client straight through the service provider’s front door. What pricing structure and revenue model have you adopted and who has signed up to your platform so far?

We work with two types of plans. The first package is a free listing; however, service providers can only be listed for two programmes, and that’s also where our highest commission is being applied. The other option is a subscriptionbased model. This means that our clients pay a monthly fee, but the revenue share will be lower. I’ll give you an example. For the Malta Individual Investor Programme, the highest commission is 35%, which can go down to as much as 17.5% for a subscription-based plan. Some of the biggest international names have already joined the platform. We only launched it a few months ago, and so far, we have a portfolio of 20 programmes and 26 agents, not to mention that a number of companies are currently finalising their documentation and will join us shortly.

Average Service Provider Fees according to CiviQuo PROGRAMME AVERAGE Antigua and Barbuda Citizenship              

USD 12,300.00

Cyprus Citizenship

EUR 37,500.00

Dominica Citizenship

USD 13,999.67

Malta Citizenship

EUR 44,166.67

Malta Residence

EUR 14,999.86

Saint Lucia Citizenship

USD 16,500.00

Saints Kitts and Nevis Citizenship

USD 12,333.33

United Kingdom Tier 1 Investor Visa

GBP 31,500.00

United States EB-5

USD 22,500.00

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High-net-worth individuals are very private people. Do you believe they would be willing to rate their service provider on an internet platform?

If we look at your website, we see that the fees of service providers can differ quite significantly. What do you believe is the reason for that, and is there a sensitivity to price in this particular segment?

I am sure there are some who don’t have a problem with that but yes, you are right, others might not want to share that information. That’s also why we decided to include the option of reviewing anonymously. In fact, anonymity is preserved even on some of the most established and successful platforms, like eBay. While some say customer reviews lack credibility if they are anonymous, we can guarantee that the accounts are real. On CiviQuo, it works like this: an agent sends a request to a client, asking to rate its services; a client receives that request and makes a decision on whether he or she wants to contribute. If the answer is yes, he or she leaves a detailed feedback on the company’s CiviQuo page.

Our research shows there is. Even though you are a high-net-worth individual, you are not willing to splash your money around without any purpose. In terms of the different prices, based on the feedback we receive from service providers, my assumption would be that intermediaries would have to have a B2B relationship with a licensed agent to be able to submit the application. An intermediary has to plan for these higher overhead costs. We also find that intermediaries might offer services that a licensed agent is not offering. For example, in Cyprus, most licensed agents are real estate developers, so they can provide the vehicle for the investment. However, an intermediary based in China, for example, might be able to provide the financing aspect that the real estate developer cannot offer. These two entities are offering the same solution, but with completely different perspectives. As a benchmark for the fees that are disclosed on our website we use the professional fees for a single applicant. We are also showing whether service providers are licensed agents or intermediaries, and what services they are offering. We only list service providers who can prove to us that they can really go the last mile and submit an application, either on their own or in partnership with another professional firm.

In what ways is this platform beneficial to the wider investment migration industry?

Unfortunately, the industry has been heavily criticised by the media, and getting increased attention by government bodies. When you look at how the industry is promoting and marketing itself, this is not surprising. What the industry needs right now is transparency. Service providers know this, and many of them talk about the need to be more transparent. Our platform, specifically due to its two key features - price disclosure as well as the review and rating system - adds a level of transparency to the industry. It is intended to build trust and create an industry that is open about its products and prices. What type of client do you expect to use your system and what role does digital marketing play in winning clients today?

If you look at the traffic so far, the age ranges from 25 to 40 years. Looking to the future, in a couple of years, the majority of investor migrants will be millennials. Millennials’ behaviour differs significantly when compared to the previous generations. People born in the 1980s and 1990s are assertive and sceptical; they prefer to be selfdirected in their investments and tend to turn to online research before making a decision. CiviQuo has all the right ingredients to win this age group. The platform will present them with a trusted source of information, with a diverse range of products and pricing transparency. This, we feel, is much needed to convince the-hardestto-reach generation. 56

Yakof Agius is the founder and CEO of CiviQuo. He is the former Chief Risk and Compliance Officer of the Malta Individual Investor Programme, and has also previously served as resource and IT specialist at HSBC Malta, and Head of HR at Henley & Partners.

Do you expect performance marketing to become a key driver for the investment migration industry in the coming years, and what are Civiquo’s plans for the future?

The investment migration industry has long recognised word-of mouth as a powerful marketing tool. Yet service providers are limited in the number of potential clients they can market when relying on personal recommendations, networking events, and so forth. Performance marketing, on the other hand, has the potential to work a lot better for the industry — it has higher chances of opening up new markets and expanding a business into new localities. It will definitely gain in importance in the years ahead. We are still very much at the beginning of our journey, although we think that the industry has an appetite for change, and is willing to try new models of client acquisition. Going forward, our plan is to grow and eventually start working with other affiliates, although we will certainly be selective with whom we will work. It is a question of transparency, openness and integrity. n


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INVESTMENT MIGRATION YEARBOOK 2019/2020

“Agents are the Face of the CBI Industry:

We Need to Act Responsibly” Giselle Bru, Chief Executive Officer of PassPro Immigration Services says the investment migration industry needs to learn from luxury brands when marketing their products, and better engage with the media, policy-makers and the public at large to help them understand the industry.

H

ow many times has a frontline member of staff influenced your perception of an organisation – whether positively or negatively? A helpful sales assistant who recommends the right outfit for an event or a gracious waiter who guides you through a confusing menu can really elevate your shopping or dining experience. On the flip side, a poorly informed customer service representative or a bank teller who failed to advise you on extra fees you would incur can ruin your perception of an organisation. No matter how well-managed, responsible, customer-focused or tech-forward a company may be, what you remember is your interaction with the person you spoke to face to face. In the Citizenship by Investment (CBI) industry, government authorised agents are the frontline. We are the face of the industry, and what we do or say shapes market perceptions. PROMOTING A HIGH VALUE INVESTMENT

Second citizenship is a highly sought-after investment for individuals across the world who seek greater freedom and a more secure and stable future for themselves and their families. The 58

“In the Citizenship by Investment (CBI) industry, government authorised agents are the frontline. We are the face of the industry, and what we do or say shapes market perceptions. ”

benefits offered by second citizenship are considered to hold immense value – allowing those who acquire it to enjoy unhindered travel to some of the most desirable destinations – both business hubs and leisure hotspots, along with numerous other benefits that allow them to enjoy better global connectivity and the freedom to do business around the world. For government authorised agents tasked with promoting citizenship-by-investment programmes, it is imperative that the channels used to educate potential clients about these benefits defend their inherent value and do not stray into promotional tactics that commoditise second citizenship. TAKING A LEAF OUT OF LUXURY MARKETING

When was the last time you received an SMS message or a “50% off” email blast from a luxury brand? The answer is probably never. If we look at the marketing and promotion of other high value products, one rarely sees the usage of pushy or cut-price tactics. Luxury brands almost never engage in price-led advertising for the simple reason that the benefits offered by high-value products are non-quantifiable.


INVESTMENT MIGRATION YEARBOOK 2019/2020

Instead, luxury brands use other sales, promotional and marketing tactics that focus on: • Storytelling – letting people who have already acquired their products demonstrate how they have improved their quality of life. • Educating consumers on the brand history, handcrafted detail and hours that go into making a product and the inherent quality of the raw materials used. • Cultivating positive brand associations and developing valuable partnerships with other highly trusted and respected brands. • They show rather than tell and often get other people to talk on their behalf – peer-to-peer references, reviews and word-of-mouth is used extensively, rather than intrusive and repetitive ads. Their entire strategy is based not on “push” marketing but on “pull” tactics – making people understand the value of the product, trust the brand and see it as a long-term investment in improving the quality of their life rather than a one-time purchase. Maintaining not just a positive brand image but also the high-value of the citizenship by investment product is crucial. It directly impacts the attraction of new investors and the capacity to maintain good relationships with existing investors, in addition to the far-reaching effects it has on resident citizens and the local Caribbean economies. THE MEDIUM IS THE MESSAGE

As agents, we need to avoid using marketing channels such as SMS blasts, deal-based offers, and ads prominently featuring Caribbean passport images – these marketing tactics perpetuate the idea that passports can be purchased easily for cash, with no other eligibility criteria or due diligence safeguards. Instead, we need to focus on tactics that build trust and highlight the inherent high value of second citizenship. Direct referrals are among the strongest channels of new business in this industry, and referrals are based wholly on trust. We need to cultivate strong relationships with our existing clients – who have already experienced the value of second citizenship – and let them act as advocates. We also need to demonstrate the constitutional strength of the programmes and the depth of the due diligence process employed. THE ROLES OF EDUCATORS AND REGULATORS

Irresponsible advertising can play a role in fuelling negative publicity of citizenship-byinvestment programmes. As agents, we need to stand alongside governments and play a key role in educating clients, the media, banks, government policy advisors, and border control agencies about how the industry works. We also need to help build a more robust regulatory environment within which we can all operate more responsibly.

Giselle Bru oversees PassPro Immigration Services, headquartered in Dubai. With more than a decade’s experience, Giselle is a trusted advisor to highnet-worth investors and policy-makers within the investment migration community. Giselle brings together a solid background in government service – drawn from time spent working at the InterAmerican Development Bank, the Ministry of Health and the American Embassy in Belize – with in-depth knowledge of the real estate landscape in markets as diverse as Panama, Belize, the Caribbean islands and Cyprus.

As agents, we should pursue a far-sighted communications strategy that is built less on transactional communication and more on educating the consumer – on the programme mechanics, the strict and deep due diligence requirements, and the duties alongside the benefits. Alongside these efforts must come a strong push for educating policy-makers, regulators, immigration departments, and law enforcers to understand how and why citizenship by investment programmes operate, how they respect existing banking, law enforcement and AML/FT regulations, and how they contribute to the long-term sustainable development of the countries that offer them. TRANSFORMATIONAL CHANGE

Most of the countries currently operating CBI programmes are small island nations for whom CBI receipts constitute a significant channel of foreign direct investment, and a source of debtfree income. Monies from CBI programmes have not just financed infrastructure development, they have supported social security and community health programmes, and served as an integral lifeline during devastating natural disasters such as Hurricane Maria and Hurricane Irma that wreaked havoc in the Eastern Caribbean a few years ago. Advocacy efforts must focus on shining a light on the positive impact of these programmes on the countries that offer them and their resident citizens, while also highlighting how the self-sufficiency of these nations is in the interest of the global community as a whole. Cultivating media contacts who can serve as partners in spreading this message is a crucial way we as agents can make a difference. When talking to the media, share a balanced message that focuses not just on the visa-free travel benefits afforded to investors but on the long-lasting benefits of the programmes to the home nations. Connect media in your home countries with government spokespeople who can give voice to a broader story. Try to avoid reducing the story to statistics – annual numbers of citizenships, nationalities of investors and the dollar worth of the industry are empty facts; how have the lives of these thousands of citizens investors transformed and how have CBI receipts been utilised for community good are the real story. Tell it well and tell it often. As with all industries, stronger regulation will go a long way in helping the industry and its players mature more rapidly. It is therefore highly encouraging that several CBI units have recently expressed clearer guidance on advertising and promotional best practices. What we say and do as agents has a long-term impact on the future of the citizenship by investment industry. It’s time we practice accountability for our actions and promote the programmes responsibly. n

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Gerd Damitz, Past President of the Canadian Association of Professional Immigration Consultants (CAPIC)

Regulated Consultants Keep Fraud at Bay While Canada has long been self-regulating immigration consultants, the country is now on its way to giving the industry watchdog more power to investigate offenders and enforce regulation. Gerd Damitz, Past President of the Canadian Association of Professional Immigration Consultants (CAPIC), talks about Canada’s experience in self-regulation and explains why he believes that Canada can be a role model for others.

Can you give us a brief overview of the Canadian Association of Professional Immigration Consultants (CAPIC) and the regulation of immigration consultants in Canada?

CAPIC is Canada’s largest non-profit organisation of immigration practitioners and has some 2,500 members. All our members are regulated by the Immigration Consultants of Canada Regulatory Council (ICCRC), the current industry self-regulator overseeing immigration consultants offering paid advice, consultation, assistance or representation services to individuals planning to immigrate to Canada. All immigration and citizenship consultants – there is a total of 5,000 in Canada – need to be licensed by the ICCRC.

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When did Canada decide to regulate consultants and how would you describe Canada’s regulatory journey so far?

Canada started looking at regulating immigration specialists some 20 years ago, at a time when there were a couple of fraud cases and missing standards shaking the industry. However, the road to self-regulation was long and winding. Initially, we faced strong opposition from the law societies which challenged the idea of non-lawyers representing clients in immigration matters. The Supreme Court of Canada eventually ruled in favour of immigration consultants providing broader legal access to the public. In 2004, the first regulator for the industry was set up, the Canadian Society of Immigration Consultants (CSIC). However,


INVESTMENT MIGRATION YEARBOOK 2019/2020

in the years that followed, CSIC was heavily criticised by the public and practitioners alike, due to internal mismanagement, and eventually CSIC stopped operating. The Immigration Minister at the time then asked for submissions from candidates interested in becoming the regulator of immigration consultants, and we, as CAPIC, assisted and supported the bid of the ICCRC, the current regulator. However, the problem of unauthorised practitioners persists to the present day.

We spent many hours trying to convince our colleagues that this would be the tool to overcome existing deficiencies. The next step was to convince government and policy-makers, and we haven’t stopped lobbying to this day. Selfregulation is a privilege, not a right, which the Government of Canada can remove, as it has previously done. We have been talking to all members of parliament, not just to government, showcasing that self-regulation is working. We know that there has been room for improvement, but the point is that both the industry and the regulator are learning from mistakes and improving accordingly. So we lobby on the micro and the macro level, and also focus our attention on the media and the general public. A major point has been about getting journalists to make a clear distinction between regulated consultants and unregulated practitioners, and the message seems to be getting through. In addition, we are running a number of initiatives to show the general public the benefits of the current system and are present in communities where we offer free immigration clinics.

Is fraud a big issue in the industry?

Not so much in terms of regulated professionals, though black sheep are everywhere. However, it is a huge problem on the unregulated side. Thus far, there is very little we can do. The ICCRC was established as a not-for-profit corporation and has no regulatory power to pursue unauthorised immigration practitioners within Canada. They can only forward related complaints to the Canada Border Services Agency (CBSA), which naturally will concentrate their resources on very serious cases. Besides, most unauthorised practitioners are based outside of Canada, which makes it even more difficult to deal with fraud cases. We have been lobbying intensively over the past years to provide the ICCRC with the statutory power to proceed with complaints against unauthorized practitioners and obtain also more enforcement power with respect to regulated consultants. In our opinion, it is important that a regulator has international reach and the power to negotiate agreements with foreign government departments in order to address unregulated practitioners operating outside Canada, but handling Canadian immigration files. I am happy to add that our efforts are bearing fruits. In April 2019, the Government of Canada proposed in a federal statute the creation of a new body, the College of Immigration and Citizenship Consultants (CICC), to govern and regulate immigration and citizenship consultants and ensure their professional conduct. Under the current plans, the system will retain self-regulatory elements, but the College would have the powers and tools required for vigorous oversight, enforcement, investigations and punishment to root out fraudulent, unregulated immigration and citizenship consultants and hold them accountable for their actions inside and outside of Canada. CAPIC has been instrumental in shaping Canada’s legislation and creating a regulated environment for the profession. What would you highlight as the main challenges along the way to this newest federal statute?

The biggest challenge was to convince the consultant community in the first place. I do not exaggerate when saying that initially there were only a handful of people who believed in the idea of self-regulation by federal statute.

Gerd Damitz holds a BA/ MBA in Corporate Planning & Human Resources. Besides his decade-long experience as an expert in Strategic Planning and as a General Manager of a Stock Exchange Registered Corp, he has been a professional Canadian Immigration Consultant for the last 20 years. He also held various executive positions in associations significantly defining the existing immigration consultant industry structures. He is a Past President of AICC, a Founding & Past President of CAPIC, a Founding Director of the Regulator ICCRC, and received for his contribution several industry awards. For many years he has been a leading Industry Association representative at meetings with the Canadian Government and Members of Parliament.

Do you believe Canada could be an example for other countries to follow, and do you have any advice for professionals seeking to address negative perceptions of the industry?

I think Canada can be an example, even for countries and organisations in the European Union. Canada is a federal state and lobbying here means dealing with many provincial governments who actually have a lot of power. In a way, it is pretty similar to the situation in Europe with its different actors who all follow their own agenda. We know from experience that it requires a lot of patience to achieve a common position that works for all, but the only way to get there is to convince different parties in different regions with rational arguments. It is very important to make it a bi-partisan subject, and in my opinion the key words are ‘consumer protection’. Consumer protection is in the interest of everyone; politicians, policy-makers and the industry itself, since we all know that one bad apple spoils the whole barrel. What’s your outlook for the future?

We still have a lot of work ahead of us. Federal elections are scheduled for autumn 2019, so it is very important for us to continue lobbying to all parties. Even though right now it looks like we will be able to continue with elements of self-regulation, the potential of a full government regulation remains. We argue that we are a young industry, self-regulated only for about 15 years, but the sector is maturing quickly. If you compare this with the law societies that are 200 plus years old, we have come a long way in a relatively short period of time. n

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The 5th Investment Migration Forum

Save the Date e t th 4 a  - June 2020 D e 0 st

h 2 t 0 e 2 Sav th June st -4 1

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INVESTMENT MIGRATION YEARBOOK 2019/2020

Global Citizen Tax to Shift  Industry Focus? Armand Arton has long been calling for the introduction of a levy on investment migration programmes to source funding for humanitarian assistance and development projects that can help address the wider causes of migration. As the industry is reaching maturity, “we have the opportunity to do things right,” Arton writes.

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lobal citizenship has helped shape a brighter future for the 1% of the world’s high-net-worth individuals and their families, fortunate enough to access bigger and better opportunities across the globe. While the industry’s focus was primarily on offering second residence or citizenship to the 0.001% of the world’s migrants who can afford the investment, it has neglected one of the most pressing opportunities in its realm: extending the same benefits to those who can’t. The failure to do so not only hurt the industry’s reputation but it allowed it to become a target of unwarranted attacks. Migration has endured for thousands of years, affecting millions of people from all walks of life, each with the goal to either survive, or the desire to strive.   

Global Citizen Tax

The idea of the Global Citizen Tax was first introduced in the midst of the refugee crisis back in 2015. As global challenges continue to grow, the Global Citizen Tax initiative becomes even more relevant and needed. As an industry reaching maturity, we  have the opportunity to  do things right. A united industry represents a stronger force, and initiatives like the Global Citizen Tax could help accelerate its growth while advocating for the other 99%. With the potential to raise over €1 billion over the next five years, the Global Citizen Tax would be fuelled through the contribution of investors who would add between 1% and 5% to their prescribed investment for second residence or citizenship in an EU member state.    Current Migration Crisis 

Despite the lack of news surrounding the continued influx of refugees flooding from the Middle East and North Africa into Europe, migration remains a dominant trend that continues to exact a large toll on the families who flee for a better life, the countries receiving them, and the international institutions and NGOs charged with providing basic humanitarian assistance. According to the UN High Commissioner

for Refugees (UNHCR), “as of 30 June 2018, there were a total 70.4 million people of concern”. Their figures also reveal that last year alone, more than 116,647 refugees and migrants risked their lives crossing the Mediterranean Sea to reach Europe. Meanwhile, the global refugee population continued its upward trend reaching 20.2 million by mid-2018. UNHCR estimates that the average time a refugee from Syria will remain in that status is 17 years – creating a lost generation of families and children who may spend their formative years in limbo. In addition, the number of people who have lost their lives at sea is devastating – an estimated 14,281 people since 2015, half of whom were women and children. This is nearly the same number of families who invested in a second residence or citizenship in the EU during the same period.      Industry Solution 

Armand Arton is the founder and president of Arton Capital. His professional designations include Chartered Investment Manager (CIM) and Fellow of the Canadian Securities Institute (FCSI). He graduated with a BA in Finance from Ecole des Hautes Etudes Commerciales (HEC) and an International Baccalaureate from College Jean-de-Brébeuf.

The global citizenship industry should be part of the solutions by joining hands with partners, governments and international organisations to address such challenges. Various European countries that are accepting refugees are also in many instances attracting foreign investors through their Global Residence and Citizenship Programmes for investors, including Cyprus, Malta, Portugal, and Spain. In Europe, such programmes have attracted more than €15 billion in capital over the past 10 years. It can be broadly assessed that the volume of these programmes for the period 2017-2018 has reached over €2.6 billion globally, growing annually at nearly 25%. Based on these numbers, the volume of direct economic benefits from the implementation of such a Global Citizen Tax on the popular immigrant investor programmes could reach as much as €1 billion in the next five years.  By shifting our focus on sharing a global responsibility  and  ensuring  the industry enforces its mission to empower sustainable migration, we are advocating to unite the resources of 1% of the world to help the remaining 99%. n 63

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What it takes to build AN

Efficient RCBI Programme

F

or the past four years, I have been reviewing most of the world’s business migration schemes. Every year I analysed and dissected 100 such programmes for our database and our reports. All that knowledge enabled us to understand trends in the industry, mechanisms behind the programmes, and which nationals are drawn to what programme. It also allowed us to predict which investment migration programmes will be successful and which will struggle to gather momentum. In our latest Government Report , we wrote about how governments can use investment migration to strengthen their economy. The report spans 100 pages, but I will try to summarise it.

What’s your country’s economic need?

Eight of the ten countries with the worst Current Account Balance in the world have a CBI programme. This, of course, is not a consequence of the programmes, but rather the reason why a CBI came to be. It generally takes a large amount of political sacrifice to launch a CBI, but it can be justified when it substitutes drastic austerity measures. All investment migration programmes should be built based on specific economic needs of a country. It is important to assess those needs and build a programme that makes sense. A high amount of government debt and high unem64

Stéphane Tajick,  President and  Chief Advisor of STC, highlights what governments should keep in mind when designing an investment migration programme.

ployment are the most common woes that governments want to tackle. In most cases, efficient RCBI programmes can help heal the country’s economy if they are backed by logic and data. Understandably, CBI programmes have a greater impact in small countries, given that an additional revenue of $200m a year affects smaller economies more than larger ones. It is also important to consider regional needs within a country, since disparity can exist. Certain regions have stronger pull factors than others, which could affect the goal of any policy. For example, in Spain the need for real estate investment was pressing after the 2008 financial crisis. The investor programme with a real estate option was created in 2013. However, over the years, the number one investment destination was Barcelona, the region that needed it the least, and where people today suffer from housing unaffordability. This means that assessing regional needs, and making sure that push and pull factors are addressed, is immensely important. Tracking performance

Every serious investment is tracked and assessed along the way. Investment in an RCBI programme should be no different, especially when it’s made to be an economic development policy. Tracking performance is not only impor-


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use for RCBI programmes that are supposed to have positive economic impacts. Factors such as whether a country is providing free university and health care also need to be taken into consideration when fixing eligible ages for children and parent dependents.

tant to assess if the policy is working, but also to optimise its impact and to make sure it doesn’t overheat certain markets. For example, an entrepreneur programme created to address high unemployment should start lowering its output once unemployment starts approaching the desired number. The example of Barcelona and the Spanish investor programme showed that untracked performances could also have a negative impact on the economy, because in this case the real estate market overheated. It should be noted that the Barcelona property market didn’t overheat because of the investor programme; nevertheless, the investor programme should prevent investment in overheated property markets. Therefore, tracking price indices is as important as implementing quotas, for the policy to have the desired effect. Meanwhile, whatever your country is offering in exchange of investment must be competitive in the global market. A CBI programme of a country with a poor passport in terms of visa-free travel will not gather much revenue. At the same time, it will be hard for a country to attract innovative start-ups if it is not ranked high as a place to do business in. High level of transparency and due diligence

Investment migration has been under a lot of criticism in the last few years, most of which is unfounded and unfair. The EU parliament singled out RCBI schemes as a security risk, although these apply a higher level of due diligence than any other residence or citizenship pathway. It’s becoming a norm to have four-tier due diligence system applied to any programme. Transparency about the number of applicants and investment received should also become a norm. One thing we advise governments to do is to follow the Quebec model of adding an extra layer of defense by having solid intermediaries between the government agency and the applicants. In the case of the Quebec Immigrant Investor Program, these are financial intermediaries that serve the purpose of filtering applications, holding the investment funds in escrow and marketing the programme. Pricing and market research

It’s important for every government to do its research on competing RCBI products before launching their own programme. Like any product, it should be priced based on production costs and market price. Market price can be obtained by comparison with similar countries; after that it really depends on the production level – are you looking for 100 applicants a year or 1,000? But production costs are much more obscure when it comes to a RCBI product. There are direct costs associated with it, such as processing the application, marketing the programme, due diligence on files and so on. Then there are other costs that are more abstract, such as the cost of having an extra citizen. An easy estimate is to take the government budgets at different levels for the year and divide these by the population. That’s a high number, but it’s the benchmark I

Someone needs to make money in order to sell your programme

Stéphane Tajick is Head Advisor of Stephane Tajick Consulting (STC). STC has become a leading provider of data and reports for the investment migration industry with detailed data from 150 world cities and reports covering over 200 immigration programmes catering to entrepreneurs and investors. Prior to setting up STC, Stéphane was involved in different sectors ranging from hospitality to retail.

In order for the investment migration industry to promote a RCBI programme, it needs to be profitable for them. It’s not a question of greed; working on a new programme takes considerable investment. The industry needs to know it’s going to be profitable for them to do so. This is a key aspect that was overlooked for many years, and makes a significant difference in terms of the popularity of a programme. Commission is a possibility, but not the only one. The Quebec Immigrant Investor Programme, for example, allowed financial intermediaries to offer financing to investors, and by providing those services, they were able to earn significant revenue that made the programme particularly attractive to them. They were, in turn, able to commission immigration consultants that send them clients. Besides, for large firms scalability plays a role. Five to ten applicants are not enough to support the investment they need to enter a new programme, while the potential to duplicate administrative and application processes is important. Entrepreneur and start-up programmes often lack this, since most of them require a custombuilt business plan. Avoiding sudden changes

A few years ago, the UK tier 1 investor programme was amended, and had its investment amount increased from £1m to £2m. This sudden price change led to a collapse in demand during the following year. It took a few years for the demand to recover, and this after an important loss in earnings. At this point, it should be said that the decision in itself to increase the amount is not subject to debate. Rather, it’s about how they went on to implement those changes. 21st century policy-making is not only about making the right policies, but also limiting the negative impact policies could have. In this case, other than the loss of earnings, there was a negative impact on the industry professionals that supply candidates to the programme. Due to significant drop in demand, their revenue suffered and staff were laid off; firms that were in a fragile state most likely collapsed. This is why such changes must take place over time, and price changes should be phased in. Significant changes, such as a price drop, are only recommended if a government wants to bring its programme back to life. Even if a government wants to close a programme, it’s recommended to phase it out, and government should announce its intentions long before. Otherwise, this might affect the reputation of the investment migration industry, and that of all other interconnected industries. n 65

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Furthering the Investment Migration Industry’s Sustainability

EU member states with the sovereign right to manage their own national economic policies are feeling the weight of increased pressure from EU institutions and international lobby groups to make changes to, or even phase out, their residency and citizenship by investment programmes. Julia Farrugia Portelli, Malta’s Parliamentary Secretary for Citizenship, Reforms and the Simplification of Administrative Processes speaks to the IM Yearbook about Malta’s stand and perspectives in this regard. Our Challenges

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he Maltese programmes for residency and citizenship-by-investment (RCBI) have both been categorical achievements. Over a brief period of time, my country launched robust propositions that quickly caught the eye of investors looking to having alternative opportunities for relocation, mobility, education, and global business. Our programmes are now well established in the sector, and we believe they give competitors a good run for their money. We ascribe to this success several elements – a robust framework, strategic marketing in receptive regions, and a thorough due diligence process that ensures only the most fit-and-proper individuals and families are accepted and granted Maltese residency and citizenship. Beyond doubt, by far the most attractive feature is our country itself. With an economy that keeps punching above its weight, a government that’s open to entrepreneurship, innovation and business, and an increasingly cosmopolitan lifestyle in a safe and stable jurisdiction, choosing Malta becomes easy.

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“Indeed, our processes are considered a benchmark to be emulated in the industry, and we are willing to share our best practices so that we can work towards standardisation in the sector.”

Sometimes, then, success brings on its own set of challenges. Notwithstanding the sovereign entitlement of Member States and countries to offer second citizenship and residency, notwithstanding being enablers of mobility, offering global citizens better family situations and fresh opportunities to do business, there is a mounting pressure on phasing out these programmes. Although we are not on the same page, we acknowledge and understand the concerns that are being voiced in various echo chambers. They disregard the valuable direct contribution to sovereign wealth and state economies. They overlook the legitimate global demand brought about by regional political and economic volatility. They discount the fact that the percentage of individuals granted citizenship and residency in the EU via investment is a minute fraction of those naturalised by other means, where the due diligence process is nowhere like that employed by RCBI programmes. We acknowledge the apprehension that disreputable individuals may be able to find their way into the Union. However, we are confident these fears can be allayed by a guarantee of thorough due diligence that leaves no stone unturned in filtering out these individuals. We say this with the comfort that Malta already applies the highest of standards in enhanced due diligence checks. Indeed, our processes are considered a benchmark to be emulated in the industry, and we are willing to share our best practices so that we can work towards standardisation in the sector.   Despite this, all investment migration programmes should aim for attaining the highest standards to ensure that integrity and reputability become benchmarks across the industry. For the sake of transparency, Malta also regularly publishes the names of new citizens, and takes all the necessary steps to uphold European regulation on anti-money laundering, counter terrorism and tax avoidance.   The Future Ahead

In this context, it is clear that the way forward for sustainable RCBI programmes is one of strict self-regulation, applying the highest operational standards that appease the most demanding of regulators. n


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The World of Investment Migration:

What’s New? The investment migration landscape is fast evolving, with a greater number of countries launching residence, entrepreneur or citizenship programmes. The IM Yearbook has reached out to the industry to see what’s hot and what’s not.

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INVESTMENT MIGRATION YEARBOOK 2019/2020

Greece

Greece has won the laurels of attracting record number of applications to its golden visa programme in 2018. The country issued a total of 11,445 visas to investors and their family members last year, with China being the top source market accounting for more than 6,800 visas. Since the introduction of the programme in 2013, Greece issued more than 35,000 golden visas. However, mired in controversy, according to agents the outlook for 2019 is less rosy. Demand will likely drop, partly as a result of newly brought in measures that include a ban on paying for property through credit card terminals, which have allegedly been used to circumvent Chinese capital restrictions in the past.

Portugal

The shine seems to have come off Portugal. Once the bellwether for the industry in terms of attracting applicants, the golden visa programme has taken somewhat of a dip. The total investment in the programme dropped 31% in February compared to the same month in 2018 according to figures released by the country’s Foreigners and Border Service (SEF). The programme may well attract further controversy because many applicants who entered the programme did so with the expectation that after a number of years they would be able to apply for citizenship. Soundings coming off from Portugal’s government seem to indicate that this may be a remote possibility for those applicants who have not actually relocated to Portugal. 71

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The UK

Despite the unknown outcome of Brexit negotiations, the UK appears to remain an attractive destination among wealthy migrants, especially among the Chinese. In 2018, Chinese applications for the Tier 1 investor visa have reportedly increased by 19%, and accounted for 63% of the 228 applications last year, up from 50% in 2017. Uncertainty surrounding the programme’s future was seen as one reason that prompted applications. In addition to the UK’s Brexit woes, the government had announced that it would stop the investor visa programme amid concerns that adequate compliance checks were not being conducted. While this decision was overturned following strong opposition, new rules, especially with regard to source of funds, were introduced to reform the programme. Besides, the UK programme could see another windfall from Brexit: The investor visa might become an attractive option for those Europeans who may wish to live in the UK but will not be able to do so as easily as right now once Brexit takes place. Meanwhile, the UK government discontinued the Tier 1 entrepreneur visa category, replacing it with the “start-up visa” and “innovator visa” categories, hoping these will spark economic growth, particularly in the UK’s tech sector.

Austria

Austria has one of the oldest, and, in fairness, one of the programmes that is held in most esteem. However, it is also one of the least transparent, with no clearly defined and predictable path to citizenship. Little is known about the programme’s processes nor about the number of applications, but the programme continues to have its appeal (so we’ve heard). Flying in the face of Europe’s drive for greater transparency and sharing of information, it appears that Austria didn’t get the memo.

Thailand

Much like its tourism tagline “Amazing Thailand”, the country is carving out its own niche in the market, with retirees looking to Thailand for their second lease of life. Initiated by the Thai Government to attract wealthy travellers, families, investors, and entrepreneurs, the Thailand Elite Residence Programme offers applicants extended stays in the country, between five and 20 years, at a one-time cost of approximately $16,000 or $68,000, depending on the option chosen. While the main target markets are business travellers needing fast entry and exit in and out of the country, thus far most demand is stemming from retirees who, if they stay in Thailand for more than 180 days per year, stand to benefit from an attractive tax regime.

Moldova

Moldova is the other European newcomer on the investment migration scene. As one of Europe’s least developed countries, it might appear an unlikely place for the launch of a successful citizenship-by-investment programme. However, the country’s location and cultural mix definitely holds a very unique appeal. The programme provides access to 122 destinations, including Russia, the post-Soviet states and Turkey, while visa-free access to the Schengen area is the cherry on the cake. It is the first programme of its kind to offer this unique combination of visa-free travel destinations.

In Focus: Moldova Iulia Petuhov, Head of the Moldova Citizenship-by-Investment Programme, lays out the key elements of her country’s programme. What was the main objective behind the introduction of Moldova’s CBI programme?

Moldova is undergoing a comprehensive process of modernisation and economic innovation. However, as is the case with all sovereign states, we are in a competitive market for foreign investment and for the necessary liquidity that must be injected into the Moldovan sovereign balance sheet. This is where the Moldova Citizenshipby-Investment Programme (MCBI) comes in. Not only will there be a stream of non-debt bearing capital flowing into our development fund, but we also believe that MCBI will act as a global marketing platform that

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demonstrates the value of the Moldovan economy to potential FDI investors. We expect that there will be significant crossover between MCBI investors and FDI. The programme is in its early days; however, MCBI has a unique proposition in terms of market access, price point and the potential for further investment in a deeply fertile corporate environment. We are now seeing our first applications nearing completion.

What are the big issues that newly launched programmes have to deal with? The core issues that all participants in the investment migration industry must publicly

and demonstrably manage are governance and due diligence. We should all work together to ensure a common set of rigorous standards that demonstrate how seriously we take these issues, and possibly develop a roadmap towards some sort of supra-national regulation. We must demonstrate the societal value creation of the industry, and also that the industry is at the same level as international capital markets when it comes to KYC and sources of funds procedures. Secondly, while we are in a competitive market place, we believe that demand for these programmes is so strong that there is no need for any programme, Moldova’s included, to significantly reduce

their fees. We should all have confidence in the value of the product. You don’t see investment bankers drop their fees, so why should sovereign states?

What sets Moldova’s programme apart from its competitors?

We are confident that our offering will be very attractive to the global HNWI investor base. Moldova has a unique proposition, with visa free access to Schengen as well as to the post-Soviet space and Turkey. We have already seen applications that are specifically driven by our unique offering.


INVESTMENT MIGRATION YEARBOOK 2019/2020

The US

Turkey

Demand for Turkey’s citizenshipby-investment programme has taken off spectacularly following a hefty price-cut in late 2018. Under the real estate option, the minimum investment is now $250,000 instead of the original $1 million. The deposit option decreased to $500,000 from $3 million, and the fixed capital investment option’s lower limit is now $500,000, whereas the original amount was $2 million. Foreigners who would like to create jobs in exchange for Turkish citizenship only need to employ 50 people instead of 100 as required previously. One reason for Turkey’s attractiveness is that it provides a route to the US in the face of a growing EB-5 backlog. According to industry professionals, a growing number of applicants choose to first invest in a Turkish passport and then apply for the E2 entrepreneur visa through their new Turkish citizenship.

“Turkey received 250 applicants during the first year of the programme. However, given that the government has significantly decreased the necessary minimum amount of investment in all options, it is clear that the number of investors will multiply in the coming years. Meanwhile, as Montenegro closes the chapters one by one to reach member state status of the European Union, the value of the Montenegrin passport is expected to increase sharply.” Laszlo Kiss Managing Director of Discus Holdings

Demand for the USA’s EB-5 programme continues unabated, despite a growing quota backlog for certain nationalities. Hopes are high that one of the most successful residence-by-investment programmes in the world will soon receive a facelift. The EB-5 programme has been running on numerous shortterm extensions, with the current extension expiring in autumn 2019. However, the industry is optimistic that the programme will be maintained despite the anti-immigration rhetoric of the ruling political establishment. Discussions on the modernisation of the programme are reported to be at an advanced state. The new version of the programme could see the visa ceiling expand from 10,000 to 50,000 per year, but on the flipside, cost could also increase, with the current minimum investment of $500,000 going up to north of $1 million.

Malta

As a member of the EU, Malta has been one of the great success stories of the investment migration industry. With Malta’s warm and sunny weather, historic charms and Mediterranean lifestyle, it is easy to see why the island has become one of Europe’s top destinations. Malta’s residency-by-investment programme proved to be a reputable, advantageous and competitive programme, attracting over 1,500 applications since its introduction in 2015, according to the Malta Residency Visa Agency (MRVA). The country’s citizenship-by investment-programme, the Malta Individual Investor Programme, is equally successful. Thus far, 900 applicants completed the programme, generating over €760 million in direct payments to the Government of Malta. Malta’s citizenship-byinvestment programme has been capped at 1,800 applicants but the Maltese government has already announced its intention to extend the programme. However, it is considering more stringent criteria.

Inside the MRVA

T Charles Mizzi, the new CEO of the Malta Residency Visa Agency, provides insights on the Malta Residence and Visa Programme ’s performance and shares his thoughts on the industry’s way forward.

he Malta Residency and Visa Programme (MRVP) was introduced in 2015 in order to enhance Malta’s sovereign wealth and to attract foreign, quality talent and investment to the country, while offering second residency benefits and international mobility to global citizens. During the past 18 months, the programme has seen a huge rise in demand. So far, the programme has attracted over 1,500 quality applications. Most applicants hail from China, while we are also seeing interest from other regions such as the Middle East, Russia, Turkey, South Africa, and India. The high application volume has been particularly challenging to process. Our primary aim is to find a balancing act between efficiency and maintaining the strict processes we employ to ascertain the most rigorous of due diligence checks on all applicants and their dependants. Integrity is the be-all and end-all objective of a sustainable, reputable programme. The Agency is young and small, and it has to grow

in tandem with the programme’s rapid success. As the relatively new CEO, this is my priority – to see the Agency develop and strengthen its operations, while studying and analysing new opportunities. We expect the industry to continue on its growth path, with more countries starting to offer residence-by-investment opportunities. We believe that the future of any residence-by-investment programme depends on strict self-regulation that upholds the highest of standards. There is no doubt that the concerns of industry critics and lobby groups with regard to transparency, security and good governance are putting pressure on all countries offering investment migration programmes. Malta already implements a rigorous four-step screening process, while also adhering to international anti-money laundering legislation. However, we understand these concerns, and we are ready to share our best practices for them to become a benchmark in the industry.

So far, the programme has attracted over 1,500 quality applications.

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Cyprus

Cyprus’ citizenship-by-investment programme helped bring the Cypriot economy back to boom mode. It served as a great boost for the struggling real estate sector since most investors preferred to invest in property. However, acknowledging that some aspects of the programme needed to be improved, Cyprus recently unveiled a series of reforms. Among the changes were stricter criteria for applicants who now need to undergo background checks by a specialised due diligence firm, the introduction of an annual cap of 700 passport approvals to main applicants, as well as a requirement for applicants to already be in possession of a Schengen visa.

Estonia

Having successfully broken new ground with e-residency, Estonia could well be the dark horse of the investment migration race and should definitely be on everybody’s watch list. After attracting almost 55,000 e-residents, the country is now looking to bring this level of innovation to providing visa-free travel, which could well turn out to be a game-changer for global mobility.

Canada

Canada has had a long-term on-off relationship with the investment migration industry. Despite being one of the frontrunners of this industry, the end of the Canadian Federal Immigrant Investor Program is quite possibly the single most important factor that contributed to the success of America’s EB-5 programme. However, for those wishing to move to a new country, Canada is still an attractive choice given its multi-cultural, safe living environment. Quebec is the focal point of Canada’s investment migration industry. Unlike many of its counterparts, relocation though is not an optional requirement but a must for applicants of the Quebec Immigrant Investor Program.

Montenegro

Montenegro’s citizenship-by-investment programme is probably going to be the next big European contender in the investment migration arena, with a lower pricing structure than many of its European competitors. Already an Adriatic yachting hotspot with stunning natural beauty, Montenegro is emerging as a luxury destination offering interesting investment opportunities, with some calling it ‘the next French Riviera’. Many in the investment migration industry believe that Montenegro’s programme will rapidly gain in importance as the country moves closer to European Union membership.

Cyprus Update

Michalis P. Michael, Chairman of Invest Cyprus, sheds some light on the new rules for Cyprus’ citizenshipby-investment programme.

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yprus, as a dynamic business centre, places great emphasis on attracting foreign direct investment as a key tool in achieving sustainable economic growth. The Cyprus Investment Programme was introduced to continuously reinforce the reasons why investors choose Cyprus, acting as a prime incentive for international investors to not only invest in our country, but also to make Cyprus their home. The programme contributed significantly to the recovery and growth path of the Cypriot economy, while proving a valuable instrument towards developing key economic sectors and particularly the real estate sector, at a time of economic distress. During the past few years, we have witnessed a significant upward trend in the global investment migration industry, raising $14 billion in FDI in 2018. However, the industry is also under continuously increasing attention. For EU countries, this was reflected in the recent report by the EU Commission, highlighting concerns over security, control mechanisms and exchange of information amongst member states. Cyprus supports all coordinated action to improve collaboration between EU countries, but also supports the essence of the country’s national right to establish its own policies. On our part, we are constantly implementing modifications to our programme to ensure and safeguard its viability, as well as to protect investors. Last year’s measures included the introduction

of a Code of Conduct for service providers, limiting applications to 700 per year and establishing professional due diligence processes for applicants. In February 2019, new modifications were introduced, including the need to be a holder of a Schengen Visa in order to apply for naturalisation, the inclusion of investments in the shipping sector and in Registered Alternative Investment Funds as eligible investments, the obligation to maintain the required investments for a period of at least five years from the date of naturalisation, and many more. In addition, an Annual Implementation Report that includes the number of naturalisations, geographical area of the applicants and the sector in which the investments were made, will be prepared for the sake of transparency and correct information. We expect that the programme will continue to attract foreign investment from a variety of countries; and I am referring to investments of substance, that forge real ties with the country and advance Cyprus’ economic growth. Our efforts are focusing on ensuring significant economic benefits from the programme, not only in the real estate and construction activity, but also in other sectors; and most importantly, in terms of the real economy. Overall, we do aim at enhancing cooperation at EU level in this regard, and we are always at the disposal of the EU Commission to share information, and ensure security and transparency in relevant practices.


INVESTMENT MIGRATION YEARBOOK 2019/2020

The Caribbean Region

Dubbed the global capital of ‘citizenshipby-investment’, the Caribbean provides the highest number of programmes in the world. The Caribbean programmes offer a quick route to citizenship; applications are usually approved with three to four months following the date of submission. However, with five countries operating programmes – St. Kitts & Nevis, St. Lucia, Antigua & Barbuda, Grenada and Dominica – all with similar benefits, clients may find it hard to distinguishing one from another.

St. Kitts & Nevis

While St. Kitts & Nevis is credited with inventing the concept of economic citizenship way back in 1984, the programme is currently feeling the spotlight of international media attention as it is facing allegations of fraud and financial irregularities, with agents and developers being accused of offering citizenship at way below governmentsanctioned rates through real estate trickery.

Antigua & Barbuda

Antigua & Barbuda has made headlines with its crypto-friendly stance. The government has amended the country’s citizenship by investment programme to allow payments in Bitcoin and other cryptocurrencies.

Dominica

The Financial Times CBI Index has ranked Dominica’s citizenship programme the best programme for two consecutive years. Dominica has continuously focused its efforts to strengthen its security checks, introducing a complex multi-tiered due diligence process and adopting legislation and regulations that match international standards. One advantage of Dominica is that dependent children can be included up to the age of 30 years. However, this is also possible in Grenada and St. Kitts.

“The RCBI market has reached maturity, while new entrants confirm that the need for such programmes persists. Ultimately, each programme positions itself differently, and thus attracts different kinds of applicants. As the market expands, the requirements will also become more complex, and for governments that operate with a long-term vision, being able to adapt and respond proactively is crucial. We are optimistic about the future of Dominica’s citizenshipby-investment programme. The focus on integrity, reputation and transparency is what maintains Dominica’s unique position comfortably at the forefront of the industry.” His Excellency Emmanuel Nanthan Head of Dominica’s Citizenship by Investment Unit

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St. Lucia

St. Lucia was a late-comer to the investment migration scene, having launched its programme only in 2016. Thus far, the application volume has been considerably lower than that of competing Caribbean jurisdictions, and some 330 persons have reportedly been granted citizenship during the past three years. St. Lucia seeks to position itself as a holistic lifestyle location and, going forward, it wants to offer its new citizens ample opportunities to build get involved in the economy and create strong ties to the country.

Grenada

Grenada, on the other hand, is fast establishing a reputation as the most prudent and dynamic country for second citizenship investment in the Caribbean after appointing Thomas Anthony, a former due diligence specialist, as CEO of its citizenship unit. However, Grenada’s biggest plus is its visa treaty with the US, which allows Grenadian passport holders to apply for the E2 visa that enables one to live, work and study in the USA.

Anguilla

Anguilla is the new contender in the region, having launched its Residence for Tax Purposes (RTP) programme in 2019. The Caribbean island is a British Overseas Territory (BOT) and hence cannot create a citizenship by investment programme like other Caribbean jurisdictions. Anguilla has suffered significant damages from hurricanes, and the programme is seen as a way to generate foreign investment to help with recovery efforts. Foreign nationals are required to make an annual lumpsum tax payment, purchase property and create genuine links with Anguilla such as holding bank accounts. However, in times of greater scrutiny and international pressure on all things tax, Anguilla’s tax residence programme still has to prove its worth.

“All applicants to our Residence for Tax Purposes (RTP) programme will be subject to a thorough and enhanced due diligence process. We expect this programme to grow significantly as the market becomes more aware of the benefits. It will be particularly attractive to Canadians, UK nationals and Europeans who cease to be tax resident in their home country and live very international lives that see them spend on average less than 90 days per year anywhere in the world but intend to make Anguilla their tax residence.” Philip Kisob CEO of Select Anguilla

3 Questions with… Jonathan Cardona CEO of the Malta Individual Investor Programme Agency Four years since the launch of Malta’s Individual Investor Programme (MIIP), what have been the results?

How do you expect the investment migration industry to evolve over the coming years?

The programme has been very successful – around 1,000 families were approved, of which over 900 completed the programme successfully, generating over €760 million in direct payments to the Government of Malta. This means that over €460 million have been deposited into the National Development and Social Fund run by an autonomous agency. The functions and duties of the agency are to contribute towards significant projects of national importance, supporting advancement in education, research, innovation, justice, employment, and public health. Furthermore, approved applicants have also reached out to local NGOs and philanthropic organisations, making a direct contribution of approximately €4 million. However, Malta’s economy is not dependent on the revenues generated through the programme; they are an additional boost. In recent years, we have been experiencing GDP growth rates of around 6 to 7%, making Malta one of the most dynamic economies among all EU countries.

Establishing global and common standards will be the way forward, as currently, the investment migration industry remains largely unregulated. This means that the level of international scrutiny is bound to increase. Malta has been advocating for the introduction of industry-wide standards ever since its programme was launched, while it remains one of the few countries that have established an independent regulator to oversee its operation. To this end, Malta continues to retain the world’s top citizenship-by-investment programme for the very high due diligence standards it set up. Recommendations have also proven that firms and agencies worldwide need to invest heavily in their due diligence to match this bar; these are much needed efforts that will help maintain this ongoing success without exposing the industry to unnecessary risks. The investment migration industry is also looking into developing professional qualifications as a standard for its employees. This will help demonstrate that such programmes are a step closer to reaching the much-needed high standards and a high level of scrutiny.

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Vanuatu

Vanuatu is the only Pacific island nation with a citizenship-by-investment programme. A former British and French Colony, Vanuatu remains a member of the British Commonwealth. While for many professionals the programme is not regarded as being in the top tier league, Vanuatu passport-holders enjoy visa-free travel to more than 120 countries, including the UK, the Schengen Zone and Russia. Vanuatu’s Daily Post reported that an estimated 1,800 passports were issued via the country’s citizenship by investment programmes in 2018 and that last year on average five people became new citizens every day.

Jordan

A safe haven in a region of conflict, Jordan is one of the more recent entrants to the investment migration arena, offering programmes for both citizenship and residence. While Jordan is doing well on the tourism front, and has been repeatedly named as a 2019 must-visit destination by travel guides and international media, the kingdom’s decision to formalise a route to economic citizenship was mainly motivated by a desire to attract investors to its ailing economy, which has been severely affected by the conflicts in Iraq and Syria with public debt approaching $35 billion. However, it remains to be seen whether Jordan’s programme proves popular not only for investors from the Middle East but beyond.

New Zealand

New Zealand’s investor visas are probably the industry’s ‘best-kept’ secret. Although requiring a relatively large investment amount, the New Zealand investor programme offers investors great flexibility, allowing applicants to choose from a wide range of investable assets, including new residential real estate developments, bonds, funds and private or public company equity. New Zealand has two investor visas, which either require an investment of NZ$3 million or of NZ$10 million, whereby a combined total of 2,000 applications were approved since 2008. While the country’s new law that restricts property purchases by foreigners has hit global headlines last year, industry practitioners do not expect it to have any direct impact on investor visa applicants as the law does not affect residential real estate investment under the investor visa.

“While demand for Australia is high and is expected to remain so, the biggest potential for growth is in New Zealand. Many high-net-worth investors have obtained residency or citizenship in New Zealand as a safe country that offers refuge from many of the challenges facing other larger countries such as population size, water shortages and climate change. For many New Zealand is still an undiscovered country, and the current lower demand is generally due to a lack of awareness of the investment migration opportunities available.” James Hall Managing Director of ANZ Migrate

Australia

What updates and new initiatives are in the pipeline? To date, the requirements and regulations have not changed. However, updates for the programme will be in place in the near future, which will reflect the feedback obtained from a public consultation exercise and from the report issued by the European Commission earlier this year. We went through this whole process to ensure that the updated and revised programme continues to attract successful individuals who can contribute to the country, while having in place the necessary safeguards that would counter any potential risks.

Australia has become the top destination globally for migrating high-net-worth individuals. An estimated 12,000 millionaires moved to Australia last year, which means the country has surpassed the USA, which welcomed 10,000 new millionaires, according to a report by New World Wealth. Meanwhile, Australia’s Significant Investor Visa continues to appeal to Chinese nationals, with the visa number for the permanent residence visa being subclass 888 – meaning triple fortune in Chinese numerology. With 88% of applicants in Australia originating from China, it becomes clear that the Australian government is prepared to further encourage growth of this market.

Ireland

With a fast-growing economy, an Englishspeaking environment and EU member status, Ireland has become one of the most preferred residence-by-investment destinations. Recently released figures show that the Irish Immigrant Investor Programme has approved 700 applications and has raised more than €500 million since opening in 2012. The large majority of investors – more than 90% – are Chinese, with Americans coming in a very distant second, accounting for only 2%.

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How to

Work

Together, How to

ROUND TABLE

WIN

Together

Three due diligence experts share their thoughts and opinions on how teamwork and intelligence can be a winning combination for the investment migration industry.

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Laura Austin

Senior Manager, Head of Investment Migration Due Diligence at BDO Consulting

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Adam Skowronek

Head of EDD Case Management and Client Consulting for EMEA at Refinitiv

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Karen Kelly

Director of Strategy & Development at Exiger Diligence


INVESTMENT MIGRATION YEARBOOK 2019/2020

ROUND TABLE

How would you describe the current operating environment in the investment migration industry for due diligence providers? The investment migration industry is enjoying exponential growth, with more potential applicants becoming interested in participating in the programmes, and more programmes becoming available. The need for adequate due diligence practices has been recognised in the industry, and many agencies have significantly improved their practices in this regard. However, with the increased competition and push for a faster, more seamless application process, the industry is requiring due diligence service providers to propose a viable, competitive and comprehensive product.

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Indeed, the importance of due diligence in the investment migration industry has never been more emphasised or better understood. Much of the recent increased emphasis placed on due diligence stems from heightened industry scrutiny, which has helped to highlight the necessity of comprehensive and robust due diligence. As the importance of due diligence is further highlighted to this industry, there has been an influx of new due diligence providers to the market. This is a reflection not only of the increased emphasis on due diligence, but also of the growth of the industry as a whole.

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I have personally been involved in due diligence for this industry for more than 10 years, and what I have witnessed during that time is an increasing level of engagement. We, at Exiger, are working closely together with our programme partners and we are discussing methodology, reporting and analysis, with an increasing emphasis on technology. Our clients are actively taking part in determining the best due diligence approach for them to facilitate decision-making. I hope to see that becoming the norm across all programmes.

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What issues are currently high on your agenda? I think that the industry has a good level of understanding of the importance of a comprehensive and robust due diligence process, but the practical aspects of how to achieve and maintain the highest quality of background verification still remain unclear for too many agencies. We are working tirelessly to educate agents and governments operating investment migration programmes, to guide them on best practices in due diligence, whilst also listening closely to their specific concerns and requirements.

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Exiger is working with programmes not only on thirdparty due diligence, but also on building and maintaining robust and efficient compliance programmes that can stand up to regulatory scrutiny now and in the future. This includes providing advice on best practices and standard-setting, as well as offering technological solutions to automate efficient workflows and manage high volumes of applicant information, due diligence and ongoing monitoring of applicants.

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Our priorities as a due diligence stakeholder closely align with the priorities of the investment migration industry, and advocacy efforts are at the top of our agenda. BDO is a participant in the IMC’s Special Task Force (STF), and we are eager to participate, along with our industry counterparts, in the establishment of due diligence industry standards and in the drafting of specialist reports. We understand the significant responsibility we have through our position as a major due diligence provider, and we view these efforts as essential to the protection of the industry and in the interest of all parties.

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ROUND TABLE What are the key KYC and AML challenges faced by programme operators and agents, and how do you help address them? We firmly believe that ongoing monitoring after initial due diligence is a key challenge of KYC across the board today. Risk analysis is another important challenge faced by those in this industry – the main question remains how to employ a risk-based approach that is defensible before regulators in order to evaluate applicants’ suitability. Exiger offers assistance to programmes through a number of means to address this challenge, including offering a comprehensive ‘risk matrix’ with our due diligence findings, and organising an advanced due diligence course for programme staff with a focus on employing a risk-based approach.

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I’d like to point out that the investment migration industry remains largely unregulated from an AML perspective. In the European Union, the 5th Anti-Money Laundering Directive of 2018 requires enhanced customer due diligence on third-country nationals who apply ‘for residence rights or citizenship in the Member State in exchange of capital transfers, purchase of property or government bonds, or investment in corporate entities in that Member State’. Nevertheless, many other agents operating IM programmes elsewhere in the world remain unregulated. This is why the best KYC and due diligence standards need to be shared among the practitioners to improve the overall due diligence process within the industry. Service providers such as Refinitiv have the unique experience and understanding of both the KYC requirements and best practices from the financial services industry, and so we play a vital role in educating agents and operators within the investment migration sector in this regard.

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What are the key areas that need to be considered as part of a due diligence process, and to what extent is the scope of due diligence widening today to incorporate new areas of assessment? Ongoing, real-time monitoring of applicants after the initial due diligence report has been delivered, is becoming an increasing need for programmes. This is something more sophisticated due diligence providers can offer. For a defined period following initial due diligence, regular monitoring for serious red flags can alert programmes to potential reputational concerns with an applicant, so that they are in a position to proactively respond. In more general terms, programmes are increasingly recognising the need for comprehensive inquiries, such as site visits and reputational checks that go beyond what they may have previously done in-house. Desktop web searches and traditional sanction as well as watchlist screening alone are not enough to stand up to the increasing scrutiny on the industry.

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We agree that the scope of due diligence is widening today through the application of ongoing monitoring solutions that serve to extend the ‘shelf life’ of the initial due diligence investigation. It has existed in the financial services industry for many years, and while it is a relatively new concept to the investment migration industry, the implementation of such a solution is seen as a best practice for RCBI programmes. At BDO, we approach our due diligence with a wide lens, encompassing research pertaining to the specific applicants, as well as research on their surrounding and influencing factors, businesses, associates, and sources of wealth. Other areas of our research pertain to an applicant’s reputation; personal, professional and political affiliations; and criminal, civil and fraud issues, to name a few. This wide research lens, coupled with our risk-based approach and an eye towards behavioural patterns, leads us to uncover the most relevant and significant findings during the course of our research.

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I would mention the three most important elements in CBI/RBI-oriented background verification research: the confirmation of the applicant’s identity; their risk profile; as well as the validity of the source of their wealth (SOW). While the first two are arguably straightforward, the scope of a comprehensive source of wealth assessment has grown exponentially over the past few years, including assessment of the subject’s known assets, reported versus estimated value of the real estate properties, individual salary, as compared to the industry estimate, detailed directorship and employment records, source of wealth of immediate family members and ancestors. It should also be noted that SOW research is always inherently tied to risk research, since every negative article found may have a significant effect on the wealth profile assessment. It would therefore not be enough to keep the risk scope limited to only sanction lists, AML/TF and political exposure, but expand it to litigation, regulatory, bankruptcy and law enforcement checks, as well as all-encompassing public domain research, including a widest possible selection of search engines, corporate information databases, and news aggregators.

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INVESTMENT MIGRATION YEARBOOK 2019/2020

AI-powered tools are fast becoming the new standard. What risks and opportunities do they represent? Could you provide an insight into other tools and technologies that are playing an important role today? The due diligence research process can be roughly divided into data acquisition and data interpretation. Recent advancements in AI-powered recognition of natural language allows for progressively faster public domain scrubbing, where relevant information pertaining to the applicant is readily presented to a research analyst. With the significant increase of digitised information and the increased volume of data in recent years, the tools that facilitate faster and more precise research are of utmost importance to the due diligence process. For example, litigation checks for applicants from China could take weeks if conducted manually, but with robotic desktop applications, the research through vast datasets can be performed within hours by machine, and only the relevant information remains to be analysed by humans. Another example where AI technology proves exceedingly useful is seamless passport or identity verification – with facial recognition technology becoming more and more advanced, the document and digital identity verification, which remain the core components of the due diligence process, becomes faster and more precise.

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Although it is true that AI has a lot of benefits, there is a misconception that AI might wholly replace human analysts. Indeed, with AI the routine tasks of data collection and risk categorisation have become more automated. It can be harnessed to understand language and context. AI can be refined to eliminate “noise” such as duplicates and false positives. It can also follow leads and be taught to extract data from deep web sources. AI can monitor thousands of sources in multiple languages and create alerts for new red flags, continuously refining a comprehensive risk profile for an applicant. However, the most notable AI-powered tools consist of a seamless collaboration between human and artificial intelligence to permit a person to exercise critical thinking and analysis in the most efficient manner.

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We agree that AI-powered tools alone do not constitute a sufficient or holistic solution. For due diligence to be at its most comprehensive and sophisticated, there is a requirement for both enhanced due diligence processes utilising local intelligence sources, coupled with far-reaching technology products, to include continuous monitoring solutions. A hybrid, ‘people+’ approach, using both technology and human intelligence, allows for the most comprehensive intelligence that is subject to thoughtful human interpretation and the critical analysis of the results. This type of due diligence solution satisfies industry best practices.

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Immigrant investor programmes have slightly different due diligence requirements. Does the industry need to agree on a common standard, and how could this be achieved? We do see differing standards amongst programmes, and this can be around a number of due diligence elements including jurisdictional scope, the level of reputational inquiries and documentation checks. The differences may be a result of budgetary constraints, the risk profile of applicants, or other factors. A minimum agreed-upon common standard could benefit the industry in terms of transparency and industry reputation. Setting such standards would involve more than an agreed scope list - it would entail a close examination of due diligence methodology and reporting standards by due diligence providers, as well as a review and comparison of required documentation and disclosures, after which a baseline could be established across programmes.

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The lack of AML regulation and KYC specific guidance puts the industry at higher risk of money laundering, tax evasion and fraud, particularly because of the international reach of the programmes. While minor differences in requirements are likely to appear among IM agencies on a regional basis, a high global standard of due diligence in citizenship and residence investment programmes needs to be achieved. Due diligence services firms need to come together with the agents and operators to share best practices and set minimum requirements. One such initiative is the cooperation between the Investment Migration Council and due diligence firms to continue educating agencies on best practice and encourage them to cooperate so that no singular oversight diminishes the industry’s reputation as a whole or threatens national security.

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Overall, I’d say the industry is moving in the right direction with regards to establishing common due diligence standards, and in light of the joint advocacy efforts and STF established by the IMC, the participating due diligence providers will be collaborating and working together to establish best practices for the industry. This collaboration will require in-depth research, transparent sharing of due diligence processes and coordinated identification of the best practices for the industry as a whole. Successful sharing and collaboration at both the programme- and due diligence provider-levels will work to enhance the overall quality of due diligence programmes, and will add to the ways in which we can further protect the investment migration industry.

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From a due diligence perspective, what else can be done to improve the industry’s reputational image and risk profile? The two most important factors are strong programme governance, including consistent and transparent due diligence practices, and a coordinated public relations approach. It is the responsibility of the programmes and industry as a whole to organise a coordinated and calculated strategy aimed at educating the public, and improving the overall reputation of the industry. This strategy should be built on the idea of transparency between the industry and the global community. Consistently communicating positive industry headlines to the public through strong PR representation will be crucial to shifting—albeit slowly— the general understanding and perception of investment migration.

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Transparency is key – not only with regards to due diligence scope and methodology, but also in how applicants are evaluated both during the application process and beyond. Some programmes can be more proactive in describing their due diligence standards and in engaging experienced and reliable due diligence providers able to meet those standards. Programmes should also be transparent with regard to any ongoing monitoring that is performed on approved applicants, the technology employed to monitor, how frequently monitoring occurs, and the kinds of red flags that elicit a response by the programme. Beyond that, increased transparency around the risk appetite of programmes, use of innovative technologies such as artificial intelligence, and the methodology used to assess risk and suitability of applicants, may help silence critics.

KK

We agree transparency will always be an important part of the industry. Immigration investment schemes have been accused of being a gateway for bad players and illicit funds, often times due to occasional shortcomings of insufficient due diligence processes. Since the programmes have gained more momentum in the public eye and more readily available to a much greater pool of potential applicants, agencies should strive to be perceived as hallmarks of comprehensive due diligence consumers, working together and with diligence providers, to establish a better reputation of the industry as a whole. The best due diligence standards should be applied globally by all industry members, and increased transparency of the sector would improve the industry’s image too.

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Obtaining information on private individuals and their sources of wealth can be more challenging depending on the jurisdiction. How do your particular research processes deal with this situation? Any complete and exhaustive due diligence exercise starts with robust understanding of information and nature of sources available in any given jurisdiction, particularly countries with limited online data availability. Comprehensive desktop research should always be complemented by inquiries with local registrars, litigation and regulatory bodies to eliminate any information gaps and provide a complete profile of the applicant’s source of wealth. In less transparent jurisdictions, where the access or objectivity of obtainable information may be breached, the information collected through human intelligence remains of critical importance. While comprehensive industry enquiries will not equal the information obtained through registrar checks, they often bring in great value in terms of background information or fill in the gaps of the desktop research process, providing a comprehensive background check of the verification of the subject’s true net worth.

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We approach source of wealth in a number of different ways to present the clearest overall picture to our client. This includes attempting to verify declared information concerning shareholdings, employment, real estate, and other assets; obtaining information on the business activities of affiliated companies; using AI to scour open sources and subscription databases for information directly related to wealth and income; and consulting human sources. Every piece of an applicant’s wealth history is not always in the public record, but through these various tools and techniques we are able to triangulate a powerful wealth ‘story’ that can be compared with the story presented by the applicant.

KK

Generally, we examine a few key areas that provide insight on an individual’s financial position and source of wealth. While the process we follow and the specific sources of this type of information change from jurisdiction to jurisdiction, and also largely depend on the public availability of records, our in-country intelligence resources are aware of local laws and sources, and they follow the best methods for obtaining as much information as is available to paint a picture of the applicant’s source of wealth.

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INVESTMENT MIGRATION YEARBOOK 2019/2020

How do you expect the due diligence practice to develop in the years ahead? What changes do you anticipate in terms of regulatory requirements, strategies and techniques? The landscape of international due diligence is continually shifting and changing, as new technologies are developed, sources of information come and go, and regulatory requirements regarding data privacy change. The most impactful of these variables to the due diligence process is likely changing regulatory requirements, and we anticipate that other countries will soon enact GDPR-like regulations, resulting in the alteration or complete closure of certain information sources. If this type of regulation does in fact get enacted, the source information on which due diligence relies is likely to change in many countries. What this means to the due diligence process will vary from country to country, and we will have to wait and see what the initial impacts will be. In general, given the number of variables existing in international due diligence, providers have learned to be flexible, adaptable and creative, and despite of changing external factors, programmes can count on providers to be aware of the changes, to adapt in the best way possible, and to always have the best interest of the investment migration industry at heart.

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More players are now understanding what the external due diligence service provider role is and what part of the process needs to be completed in-house. While the public domain checks and human intelligence collection and analysis can be outsourced to due diligence service providers, the documented decision-making process remains a responsibility that cannot be outsourced. More expertise will be applied internally among the agencies operating investment migration programmes to cater for this part of the due diligence process. Externally, the service providers collecting background verification information will all need to move towards a faster and more precise service, which can be achieved with the technologically advanced research and analysis tools. The increased transparency requirement combined with the scrutiny of the public eye will lead to better due diligence and documented decision-making processes globally, which in turn will lead to stricter and more secure processes preventing the abuse of the programmes and the improved perception of these.

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This industry is such that there is change every day, either with regards to the availability of information, new technologies, client expectations, or regulatory requirements. We are constantly looking to new resources and tools to mitigate against any future changes in terms of publiclyavailable information. We will also continue to invest in and adapt technology into our due diligence process to make research more automated and efficient, which means having more resources available to devote time to analyse and identify risk. It is looking like the industry will move towards the adoption of minimum due diligence standards; developing efficiencies now will better position us to offer cost-effective solutions to our clients to meet those requirements.

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What would be your one piece of advice to programme operators and agents? My advice would be to engage in very transparent relationships with due diligence providers to ensure the agreed-upon level of due diligence is being met, and also to publicise their commitment to robust due diligence programmes, in order to help alter the global perception of investment migration. In light of the scrutiny and challenges currently facing the industry, it is the responsibility of all interested stakeholders to participate in some capacity in the greater reputation-focused efforts.

La

Ask due diligence providers questions. It is important to understand their methodology, sources, technology, and compliance — how they are going about confirming or obtaining certain information — as well as the limitations. We encourage the programmes with which we work to ask us questions, and we are as transparent as possible when it comes to the resources used, how we confirm information in a compliant manner, and the limitations of what we can confirm. When a programme is evaluating an applicant and consulting a due diligence report, they should understand exactly what steps a provider took to, for example, verify the existence of a business, so that they can better quantify the risk.

KK

Never underestimate the value of risk management. While the enhanced due diligence process may seem difficult to implement initially, the stakes are extremely high with threats to national and international security, the risk of fraud and money laundering, damage to the reputation of the programmes and the entire industry. Due diligence is the key solution to ensuring programmes are safe and not abused by criminals, and that they can be implemented or improved easily because of the available expertise and the willingness to share best practices and knowledge among industry actors.

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CITIZENSHIP BY INVESTMENT:

The Real Drivers Behind Applications Civil unrest, visa-free travel and statelessness are just a few of the reasons behind the recent uptake in applications for citizenship and residency by investment (CRBI). S-RM analyst Sonia Spencer explains the current environment around these sought-after programmes.

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n recent months, the CRBI industry has been the backdrop for controversy. Bulgaria revoked the citizenship of Russian telecoms millionaire Sergei Adoniev who had been convicted of fraud in the United States in the 1990s. In March, the European Parliament voted to phase out CRBI programmes. As a due diligence provider for several CRBI programmes globally, S-RM knows first-hand that the recent CRBI headlines paint a skewed picture. This is particularly true for applicants

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Source: Henley & Partners Passport Index

from the Middle East, whose profiles, in fact, closely mirror the wider global political, security and economic trends in the region. The volume of CRBI applications jumped significantly after the 2011 Arab Spring, as citizens tried to escape worsening security across the region. From major Iraqi cities, applications now regularly come from engineers and surgeons who are unable to gain secure employment at home, after years of conflict and instability. Similarly, middle-class Syrians are drawn to CRBI options due to the country’s civil war.


INVESTMENT MIGRATION YEARBOOK 2019/2020

While citizens of areas of major civil unrest, not surprisingly, tend to be subject to restricted international movement, business travellers and expats from these regions choose to apply for CRBI programmes in order to gain better employment and education opportunities. A Syrian surgeon living and working in Qatar is ineligible for Qatari citizenship, which is strictly patrilineal, transferred by blood through the male line. However, travelling for business is difficult on a Syrian passport, which grants visa free travel to only 32 destinations; and obtaining a visa can be difficult with many countries cautious that Syrians will then claim refugee status. The surgeon also cannot return to Syria to renew his passport due to safety concerns. The stark differences in opportunity afforded by different passports is illustrated by the Henley Passport Index, a ranking for free movement. In this ranking, Iraq, Syria and Lebanon are placed in 104th, 103rd and 97th place, respectively. This means that Lebanese citizens, for example, can access only 44 out of 195 countries without a pre-arranged visa. Of these, 14 are small island nations — including Niue, the Pitcairn Islands and Tuvalu — not known for their education or business opportunities. A European or Commonwealth affiliated CRBI programme is therefore highly appealing.

Sonia Spencer is an Analyst at S-RM, a global risk consultancy that helps clients manage regulatory, reputational and operational risks. S-RM provides background check due diligence and training support to citizenshipby-investment and investor-visa programmes run by government agencies worldwide.

Statelessness is another reason for CRBI applications. When the UAE was founded in 1971, those who couldn’t prove their presence at unification, or lacked the necessary tribal affiliations were not allowed to claim UAE citizenship. NGOs have estimated the number of stateless individuals in the UAE to be between 10,000 and 100,000 people — numbers which persist due to patrilineal citizenship laws, assigning statelessness to the children of stateless parents. With the necessary financial backing, many are understandably drawn to apply for CRBI programmes to escape statelessness for themselves and their children. Particularly for Middle East applicants, the coverage of CRBI programmes by newspapers and politicians requires more nuance. Criminals do apply, as do controversial oligarchs. Stringent due diligence investigations are essential to keep out the minority of criminals and other fraudulent applicants. But the very large majority of applicants reviewed by S-RM are professionals and business owners from countries such as Iraq, Syria, Yemen and Lebanon. Most apply not as a cover for illegal activity but because they want better employment and education opportunities. This is a far less headline-grabbing narrative. It is also much more reflective of the motivations of applicants from some of the world’s least secure and most unstable countries. 85

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The Big Read

Disrupting the Nation State

Children born today will grow up with a radically different understanding of how governments should serve them, writes Kaspar Korjus, the former head of Estonia’s e-Residency Programme.

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’ve been thinking a lot about the future recently. Partly because it was a requirement for my job — as the former head of Estonia’s e-Residency Programme — but more importantly, it’s because my wife has given birth to our first child. My wife and I grew up during the collapse of the Soviet Union and the rebirth of Estonia as a free country, followed by the rapid reforms that led to it become the world’s most advanced digital nation. However, I firmly believe that our son is going to grow up through even more interesting and transformative times in the years ahead. Despite much of the negativity in the news right now, the overall trend appears to be positive for the opportunities that await him and other children entering our world right now. The internet and other advances in digital technology are enabling more people to live and work globally with greater freedom, independent of any fixed location. As a consequence, governments like ours in Estonia are evolving fast into borderless digital nations in order to better serve and benefit from the rise of these new world citizens.

“As a consequence, governments like ours in Estonia are evolving fast into borderless digital nations in order to better serve and benefit from the rise of these new world citizens.”

Back to the Future

It’s completely understandable if you are wary of any attempt to predict the future though. Most predictions are not usually very accurate. Consider the movie Back to the Future 2, which I’m looking forward to watching with my son soon. It’s a prediction of 2015 that was made in 1989. In their vision of the future, all technology has advanced to the next level — so cars can fly, skateboards can hover, and clothes can talk — but people’s lives are actually still stuck in the 1980s. The problem is that we tend to focus on how technology will advance, but not on how that new technology will alter the way we live our lives in more fundamental ways. In one scene, a family is sitting round a dinner table while the children are absorbed with their devices, including one that looks like Google Glass. So far, this is quite well predicted — as people with more parenting experience than me will know only too well. However, all of the devices suddenly start ringing together, and the daughter then looks up to say “dad, it’s for you”. So the movie correctly predicted the proliferation of (what seem to be) internet connected devices, but couldn’t imagine the transformative impact they would have. It’s obvious to us today that there wouldn’t be a single home phone line anymore because our communications are now individualised. As if to reinforce my point, the future Marty McFly then says he’ll take the call next door, before trying to hide messages coming through on the family’s ‘futuristic’ fax machines. This demonstrates how we keep projecting our existing ways of thinking onto our visions of the future, and fail to see the most significant changes before they happen. So to predict the future, we need to think less about advanced new technology, and more

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about new ways of thinking, enabled by technology. We must embrace the reality that concepts we consider entirely normal now could rapidly change — or disappear entirely. I believe we haven’t fully appreciated how the internet is about to change our world in other ways too. Perhaps the most important industry about to undergo digital disruption is governance. Our concept of nations might seem permanent to us now, but these are relatively new concepts, and they are not immune to disruption either. It is this change that I believe will have the furthest reaching impact during my son’s lifetime. The Evolution of Nations

For millions of years, humanity was restricted to small groups of nomadic hunters and gatherers until new innovations enabled us to farm in fixed locations. As a consequence, human settlements began to grow, and yet more innovations were required — such as currencies — to govern these communities and enable people to diversify into different societal roles. Those settlements grew by trading and interacting with each other, and then even larger structures of governance emerged to oversee this. The biggest reorganisation then took place with the industrial revolution, which further concentrated our communities in evergrowing cities that could manufacture on a large scale, to meet the demands of large populations. From this, our nations were born. This is where we are now — a very small period in human history in which the world’s population has been restrained by geographic boundaries. A nation is assigned to us at birth, and then it usually stays with us for life. This random allocation of the world’s population determines our life opportunities more than almost any other single factor. That wouldn’t make sense for any other aspect of our lives though. Take Facebook groups, for example. There are Facebook groups for almost every area of interest in the world. But imagine if you were assigned a Facebook group at birth, then had to remain within that specific online community for the rest of your life — unless you went through a lengthy and expensive process to switch to a different group. The abundance of Facebook groups is undoubtedly a good thing, but they work better when everyone has the freedom to choose which ones they want to join and contribute to. Personally, I wouldn’t want to be stuck in a flat earth group! In a similar way, different nations have different values and opportunities too. It’s only relatively recently that large numbers of people on our planet have gained the power to travel, communicate and trade across borders. I take this freedom for granted now, but my parents could only dream about these opportunities when they were my age. Now I’m the one dreaming about the even greater freedoms ahead of us if we can choose nations as easily as Facebook groups.

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“The main advantage of being an e-resident right now is the ability to start and run a trusted locationindependent EU company with minimal cost and hassle. ”

Our nations are now undergoing a digital revolution, which will radically reshape them once again — this time into borderless online communities with services that can be accessed anywhere there is an internet connection. Consider the fact that Estonia already offers almost every public service online. As Estonian President Kaljulaid recently pointed out, Estonia is the first digital society with its own state, although plenty more will follow. That’s why we launched e-Residency, in order to scale up our digital nation by offering our services to even more ‘users’ around the world. The main advantage of being an e-resident right now is the ability to start and run a trusted locationindependent EU company with minimal cost and hassle. So we are essentially exporting our business environment to those who don’t have the same advantages as us. However, this is only the start. I recently asked what would happen if  Estonia offered ‘estcoins’ to e-residents  for example, and the Head of our Tax Board speculated that e-residents could one day be offered services, such as health cover and pensions, paid for through personal taxation. We now receive frequent visits from policymakers in other states who are interested in learning from the success of ‘e-Estonia’, and even launching their own e-Residency programmes. If all countries could attract members online as easily as Facebook groups, then they can develop unique selling points for their own e-services. This digital development is good for everyone, everywhere, because it will improve the quality of governance globally if people can freely choose which nation they want to access e-services from. For a glimpse of that future, let me tell you about my son’s experience.

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Welcome to Ruufus’ World

Our child was given his ID number almost immediately after he was born into our advanced digital nation of Estonia. This forms the basis for his secure digital identity, which he will use throughout his life for authenticating himself online, and accessing e-services from both the public and the private sector. While we were busy admiring our new child at the hospital, the doctor was busy entering the first data about him into our state’s Population Registry — such as his name, sex, date of birth, and the fact that we are his parents. This information is really useful straight away because various parts of government would need it to better serve us as new parents, such as by scheduling health checks, supporting with child care and allocating our parental leave allowance. This would generate added hassle for new parents in most countries, but in Estonia the information begins flowing automatically between departments and agencies along our secure, decentralised information network known as the ‘X-road’. When we got home from the hospital and finally took our eyes off our child long enough to open up a computer, we logged in using our own secure digital identities, and used our permission as parents to add one more vital bit of data — his name, Ruufus. This is his story so far, but it’s going to get far more interesting. By the age of 7, Ruufus will be starting school to learn to read, write and code, like all other children. That doesn’t mean we expect him to code an app one day, any more than we expect him to write a novel; but these are the basic skills that he will need to understand the world around him. Ruufus’ time at school will coincide with rapid advances in the development of artificial intel-


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ligence and blockchain technology, and this will be used by governments to make smarter decisions, and deliver vastly more efficient public services. Ruufus probably won’t have the option of a career in the civil service ahead of him, but he will instead prepare for new jobs that we can’t yet begin to imagine. His schoolwork will be set and completed digitally and — unfortunately from his perspective now— that means we’ll always know if he has homework to do. Ruufus won’t just grow up in our digital nation, but also in a truly digitalised world where e-services are trusted by everyone, and offline concepts like ink signatures, scanning and posting will seem absurdly old fashioned. I know this seems scary to many people around the world now, but our experience in Estonia has given us the opposite perspective. Storing important personal data on paper isn’t just inefficient. It’s also dangerous. In contrast, we can see exactly who is accessing our digital data and then challenge any use that we consider to be unjustified. Blockchain-like technology is already being used to protect our health records by providing a public ledger, which can never be altered or erased. By the age of 15, Ruufus might want to start earning his own money for the first time. He won’t need to restrict his employment opportunities to local businesses however, as it will be just as easy to collaborate with people (and instantly get paid by them) on the opposite side of the planet. Cryptocurrencies currently show no sign of disappearing, so it is more likely that they will have evolved by then into viable decentralised currencies in which he’ll want to receive payments. That means governments will have needed to figure out how to accept (and tax them) at this point too. But perhaps governments don’t have to ‘tax’ Ruufus by then anyway. Governments can instead earn their main source of income by selling their services globally in the form of monthly subscriptions — much like how Netflix currently delivers its service. We would have to ensure that this is done in a way that improves the welfare of everyone, such as those in need of healthcare. By using smart contracts based on blockchain technology for example, Ruufus could start allocating his money directly to those that need it with greater transparency and efficiency, without the need for government middlemen. At age 18, Ruufus might want to go explore the world for himself. Fortunately, he won’t have to save up his money or do too much planning first because so much of his life will already be location-independent, including his source of income. This is already the reality for an increasing number of ‘digital nomads’ today, but Ruufus will have the added opportunity to choose which nations he wants to serve him globally. The rise of Estonia as a leading digital nation came as a surprise to many, so perhaps Ruufus will also

choose to be an e-resident of nations that seem surprising to us now because developing nations that embrace digital disruption could quickly overtake developed countries that don’t. Like me, I hope Ruufus will always be proud to be Estonian; but everyone benefits from increased engagement with other countries. He could choose to run a company in Botswana to access the emerging African business environment. He could choose to pay personal taxes (or a subscription) to South Korea to benefit from their world leading health cover and social protection. During his 20s, Ruufus might want to settle in one location, or live across many. One very important difference to most people today though is that he can make this decision more freely without the need to live next to his place of work or study. Remote work is already acceptable in many industries, and it will soon become the norm. This will help alleviate some of the biggest challenges of modern life today, such as the stress and expense of living in crowded cities, as well as the pressures caused by migration. Consider the disruptive impact of elevators, for example. Before they were introduced, the upper floors were the least desirable because they were the least accessible; but now it is the opposite. In a similar way, Rufus might not feel the need to migrate to London or Berlin in order to find work. I do hope he has even more freedom to travel than me; but he could also enjoy the freedom to access opportunities from around the world — while living in our beautiful Estonian countryside, if he so wishes. In 30 years time, Ruufus will have been building up his pension through his subscriptions to Japan, but he may also have enough money to invest more heavily in a country of his choice. Right now, ‘investing in a country’ just means investing in property and businesses within a particularly country. Ruufus, however, might have the option to literally invest in a country. After examining white papers from various countries, Ruufus could choose to invest in crypto tokens issued by the one with the best plan for the future. Perhaps Ruufus enjoyed visiting the tiny island nation of Fiji during his travels and now wants to invest in their digital development. In the digital era, there will be no reason why nations can’t scale up and achieve vast growth in the same way that great start-ups do today. If a nation like Fiji can use the investment to deliver services that solve people’s problems globally, then the country could achieve astronomical growth. Ruufus has an enormous head start in this emerging digital world, where far too many people currently face financial exclusion because the services they need are either unaffordable or unavailable in their location. By the time he is older than me though, I hope those advantages that we enjoy as Estonians will be available to everyone. n

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INVESTMENT MIGRATION YEARBOOK 2019/2020

Interview Kaspar Korjus, Former Head of Estonia’s e-Residency Programme

The Big Picture Idea:

Nation as a Service

Estonia’s e-Residency Programme is partly the brainchild of Kaspar Korjus, the former Head of the Programme. He talks about the programme’s start-up phase, major achievements and its future potential. He says that as more countries build digital services of their own, the idea of nation-as-a-service comes into sharper focus. Can you give us a brief introduction to Estonia’s e-Residency Programme and tell us how it came about?

Estonia is a small country, with a population of just 1.3 million. After the collapse of the Soviet Union, when we regained our independence in 1991, we were faced with the challenge of scaling up our nation. We looked to technology to improve our competitiveness in the absence of any other meaningful natural resources. We modernised and digitised many of the old analogue systems, and carved out a niche as a hub for tech start-ups. E-Government was also high on the agenda. A digital ID card was introduced that gives access to a wide range of e-services, including making payments, accessing full health records and online voting. We then developed the idea to take this concept a step further by giving people from

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across the world access to our public and private online facilities – and the e-Residency Programme was born. E-residents are allowed to open a business in Estonia and run it remotely, while accessing many of our e-services. The idea was to make life and business easier for freelancers, digital nomads, business owners, and entrepreneurs, working in a diverse range of sectors, including IT, financial services and travel. How was the Programme received initially?

We launched the e-Residency Programme in 2014, and at first, it wasn’t an easy sell. There was a lot of scepticism in Estonia about who would actually want to be an e-resident of our country. We had to change 10 plus laws, which means politicians and policy-makers questioned the concept. We were also not sure if the Programme would be a success, but we realised we were onto some-


INVESTMENT MIGRATION YEARBOOK 2019/2020

thing when we attracted the attention of world business and opinion leaders, and got the international media to talk about e-Residency. Among the first foreign e-residents were Edward Lucas, Senior Editor of the Economist, and American venture capitalist Tim Draper. These early adopters bought into the concept more than anything else because initially we did not have many services on offer. It was only when the programme took off that we started developing a suite of services for Estonia’s e-residents. Since the launch of the programme, our eresident population has grown to approximately 50,000 people in 160 countries. The majority of them are from Finland, Russia, Ukraine, Germany, the USA, UK, Japan, China, and India; but the programme is increasing Estonia’s reputation all over the world. From a political point of view, this fits our national security policy, which is based on building international alliances and raising global awareness of our country. What services can e-residents access and what types of people are making use of it?

E-Residency cannot be compared to any other residency product or citizenship. E-Residency does not confer citizenship, tax residency, residence, or right of entry into Estonia or to the European Union. It is not a visa or residence permit. Once approved as e-residents, foreigners receive a digital ID, which gives them digital access to services such, as a company creation and banking and payments, while they can digitally sign documents and contracts. E-Residents can also access Estonian government services for businesses. The Programme has been designed with location-independent entrepreneurs in mind, but it also proved particularly attractive to people who are financially excluded or disadvantaged. For example, we saw a surge in interest from Turkey when PayPal stopped operating there. Many don’t realise that there is a huge group of people who cannot sell their products After gaining a BSc and MSc in e-Business at Lancaster University, Kaspar returned to Estonia. He started working on e-Residency in 2014, when it was little more than an idea in the minds of a few people. He spearheaded the Programme and served as its Managing Director until the end of 2018. Today, he advises governments on e-services and is available for keynote speeches.

and services on the digital marketplace because they cannot access certain apps and financial services. What economic impact does the Programme have on Estonia?

Not all e-residents contribute taxes to Estonia, but when they do it is because they set up a company that is legitimately tax resident in Estonia. Many e-residents also generate economic activity when they use our business environment, and conduct business with other Estonian companies and service providers. Estonia has never been a tax haven, but rather an administrative haven. E-residents have created some 6,600 companies in Estonia and, according to an economic impact analysis by Deloitte conducted in 2017, have contributed €14.4 million to the Estonian state and economy. This figure is projected to reach almost €2 billion by 2025, based on the forecasted growth of the e-resident population. How do you see the concept evolving further?

Last year, a roadmap for e-Residency 2.0 was launched, which mainly aims to improve the current services, make the system more efficient, and help more Estonian companies and industries serve e-residents. One idea is the creation of an Estonian school-franchising model that would create a global network of Estonian schools, which offer a certain standard of education for e-residents’ children. This might be particularly attractive to digital nomads. Another idea is to collect social tax from digital nomads to provide health insurance cover, and access to a pension fund. We have also looked at the concept of a digital nomad visa, which would give digital nomads the ability to stay in Estonia for one year but also give access to a 90-day Schengen Visa to enable them to live and work in the EU. However, the introduction of such a visa is still being discussed, and it remains to be seen whether it will become a reality. In my opinion, e-Residency is just the first step towards a model that can be described as ‘nation-as-a-service’, whereby nations offer different services and citizens can choose what services they would like to use from a particular nation. People are becoming more global and borderless, but there are no nations that are global. This means that there is a huge demand for new services and solutions, and governments could become service providers like any other company. n

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INVESTMENT MIGRATION YEARBOOK 2019/2020

Simon Anholt, Adviser and Publisher of the Good Country Index

Make a

REAL Global Impact

Simon Anholt says the investment migration industry needs to become a force for good if it wants to win over the industry’s critics.

Can you tell us a bit about your research into global perceptions of nations? Can countries influence their image?

No, they cannot, at least not through public relations and marketing campaigns. However, many governments believe they can, and this may be partly my fault. I came up with the term ‘nation brand’ in 1996. My original observation was that the reputations of countries behave like the brand images of companies and products. Unfortunately the term gradually morphed into “nation branding”. Nation branding sounds as if the image of a country can be manipulated or influenced, but countries are definitely not in control of their images. I have been compiling the Nation Brands Index, a huge annual poll of international perceptions of countries, since 2005, and it shows that there is absolutely no correlation between what countries say about themselves and how people perceive them. Yet the notion that a country can simply advertise its way into a better reputation has proved to be a resilient one. So what do countries and governments wanting a better image need to do?

Countries are judged by what they do, not by what they say. While it is possible and necessary to market certain economic sectors and products, such as a tourism destination, an investment opportunity or the export of goods, governments cannot influence the overall image of their country simply by launching a PR or marketing campaign. These campaigns are nothing more than government propaganda, which people

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rightly ignore. Countries can only improve their image by changing the way they behave. If a country wants to be admired, it must be admirable, and it must make itself relevant to people from other nations. This means that the country must participate usefully, productively, and imaginatively, in the global conversations on the topics that matter to people elsewhere and everywhere. The list of those topics is a long one, and it includes, amongst others, climate change, poverty, migration, economic stability and human rights. There is plenty of research that shows that this investment can pay off: for example, a 1% improvement in a country’s image can lead to a 38% increase in foreign direct investment. Governments that have introduced RCBI programmes have come under increased scrutiny in recent years, with international organisations, policy-makers and the public often being critical of its concepts. What’s your view of the industry?

In my opinion, selling residence and citizenship should be viewed as an economic activity just like any other. It is a new form of foreign investment for countries and a useful additional source of foreign income. From an economic point of view, it can either be justified or not justified. If it generates more revenue for the country than it costs, economic objections against it cannot be valid. In fact, most objections are not based on economic grounds, but rather have a socio-cultural subtext. For many people, belonging to a nation is a sacred thing, which should not be shared with people who weren’t born into that nation or who


INVESTMENT MIGRATION YEARBOOK 2019/2020

haven’t been through a certain amount of trouble to be part of it. My personal view of this attitude is that it demonstrates one of the worst sides of human nature, a flat refusal to share one’s good fortune with those less fortunate than oneself. The better side of human nature would be that if you are lucky enough to live in a rich country, you should be happy to share your good fortune with others if it doesn’t materially diminish your own prosperity or opportunities.

a tiny part of their sovereignty in return for the common good. This is one of the reasons why I am so bereaved at the UK’s decision to leave the EU. But even the EU is basically a self-interest society: it is still defending its members against competition from the rest of the world. It still looks inwards. Of course, 26 countries looking collectively at their own interests is a whole lot better than 26 countries looking separately at their own interests; but if we continue like this, we will be defeated by climate change, migration and terrorism, and other global challenges. The only way we are going to tackle them is by working collectively, and the investment migration industry might be able to play a role in this.

On an EU level, we often hear the argument that passport and visa programmes offered by one member state affect the entire European Union and that these programmes are effectively exploiting an EU right.

This argument also doesn’t make any sense at all. Let’s look at another example. If a company from one member state builds a factory in another member state and starts polluting the air in that member state, they are exploiting EU rights in the same way, aren’t they? It might sound as if I am defending the investment migration industry. I have no interest in doing so; however, to me it seems ethically inconsistent that RCBI programmes are viewed differently than any other activities that countries engage in order to attract capital. The entire debate shows that humanity has yet to learn to transfer its loyalty to an entity larger than the nation state. In my opinion, this has to happen soon. We live in an age where we are facing gigantic global challenges, from climate change to migration to terrorism. They are all international challenges, and need to be tackled internationally. Can you explain this a bit more?

Today our problems are not national; they are global, yet only a minority of people feel loyalty and commitment to something bigger than their own country. My research has shown that only about 10% of the world’s population is what you might call naturally cosmopolitan. Those are people that distinctively feel they are members of the human race first, and citizens of their own nation second. The majority of people are still stuck on the idea of the nation state, which was invented in 1648. We went through an enormous amount of trouble to fix people’s loyalty to the nation state. Wars were fought over the nation state; active brainwashing took place to win people’s loyalty for something that was artificially created. To be clear, I am not talking about the love that we feel towards the land that we grew up in, such as a region with its distinctive landscapes and its people. The love for one’s country can be profound and meaningful, and is entirely different from loving your nation, which is more like saying you love your country’s government or its army. The European Union is the noblest experiment in the history of humanity: it was the first time in history that a large number of countries had the wisdom and maturity to give away

How would you see that happening?

Simon Anholt is an independent adviser to various Heads of State and Heads of Government, and during the last 20 years has advised 55 countries on strategies for enhanced economic, political and cultural engagement with other countries. He devised the concept of nation brand in 1996, and is the founder and publisher of the AnholtIPSOS Nation Brands Index, a large annual opinion poll that measures international perceptions of countries. He also launched the Good Country Index in 2014: the first ever study of what each country contributes to the common good of humanity, and what it takes away, relative to its size. Simon Anholt has served as ViceChair of the UK Foreign Office’s Public Diplomacy Board and has a Master’s Degree from the University of Oxford. He holds an Honorary Professorship in Political Science and is the author of six books including two best-sellers. His TED talk launching the first edition of the Good Country Index has been viewed more than 5.5 million times and was ranked the fifth ‘most inspiring’ TED talk ever.

I think it would be a fascinating idea if one could convert the idea of investment migration into something internationally useful, which doesn’t only benefit the country that is running the programme but also creates broader benefits. The industry needs a global approach, and much like countries, if it wants to be internationally recognised as a force for good, it needs to become a force for good. As a start, countries could agree to accept a certain number of economic migrants and refugees to match the number of investment migrants they are allowing in their country. But the real opportunity is much bigger than this. Very wealthy people are increasingly philanthropic. I reckon that one could have a very fruitful summit with all those investors who are interested in better residence or citizenship arrangements for themselves, as well as in supporting good causes. They could be brought together with countries operating these programmes, as well as with NGOs and representatives of the international community. We know that investment migration results in a substantial flow of capital, but instead of directing this capital flow from one country to another, we could see how that revenue stream could be best distributed to solve some of the most pressing global problems, while delivering the payback to the investors that they require. What do you think of the idea of nation as a service?

It is great concept because it is attempting to separate out and neutralise the crazy emotions that people feel about nationality, and regards the state as what it really is: a set of services. It is just being cool-headed about it, and that’s what we need in our current age of global challenges. I think the task for the future is to find a narrative that brings nationalists and internationalists together. The idea that nationalists and internationalist have to be enemies has emerged in the last 10 years and appears to have been very broadly accepted, which is odd because you couldn’t imagine a better case for cooperation, given the challenges that we are facing. n 93

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INVESTMENT MIGRATION YEARBOOK 2019/2020

Khalid Koser, Executive Director of the Global Community Engagement and Resilience Fund

The Big Migration Debate: Finding the Missing Link The migration debate is complex and emotional. Investment migration only accounts for a small part of worldwide migration, yet the industry has the potential to help shape a more productive discussion.

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ew issues excite controversy like migration, and when global especially when countries have to deal with a large inflow of mileaders in Europe, the US and other parts of the world, grants due to wars and economic crises. However, there is ample discuss migration, they usually talk about threats rather than academic evidence that in the long term, migration, and the sucopportunities. “But the reality is most countries around the world cessful integration of migrants into the job market, pays off. “The need migrants to fill vital gaps in their workforce and to keep their trouble is that politicians think in four to five year cycles, and there economies going”, says Khalid Koser, Executive Director of the are easier ways to win votes than making a credible case for the long-term benefits of migration.” Global Community Engagement and Resilience Fund (GCERF). According to Koser, it would be beneficial if corporates, busiWhile refugees might be the face of migration in the media and in public perception, the large majority of the world’s 258 million ness leaders and even immigrant investors openly champion the migrants have moved across borders voluntarily. What worries debate. “If they speak out and showcase why migration and a diverse workforce was beneficial for their busiKoser most is that “we are quickly losing the nesses and the economy, I am sure people would space for a sensible, honest and informed debate listen.” The discussion also needs to move away about migration. There is a polarisation of views, from philosophies, such as multiculturalism and between those who champion migrants and see assimilation, and focus on the more practical all refugees as heroes, and those at the other end aspects such as giving migrants the chance to get who believe all migrants, and especially wealthy a job, which then translates into wider opportumigrants, are criminals. Of course, the truth is nities. This, he says, is particularly true for the somewhere in between, and one of the key chal22.5 million refugees, who often spent many years lenges is to overcome these generalisations”. in refugee camps where they are being cared for Most voluntary migrants are working-age in terms of accommodation and food, but “what adults and can actively contribute to economic they really want is work”. Koser sees great opporgrowth in their destination countries. For busitunity for companies and institutions to utilise nesses, their different and complementary skills refugee skills to a much wider extent. This could can positively influence innovation and enhance include anything from manufactures tasking productivity. Research even shows that many refugees with basic assembly jobs, to providing times immigrants actually work harder than them with access to IT equipment and technoltheir native hosts. Obviously, Koser says, it would ogy. This would allow them to carry out data probe hard to argue on a purely economic case for Dr Khalid cessing, translation and online education jobs, countries to take in migrants - there always will Koser is and perhaps even writing code for companies and has to be a humanitarian element. “But I Executive around the world. “There is no end to what could think we need to cross the red line that has been Director of the Global be done, and this would also give refugees access somewhat drawn between humanitarian and Community Engagement to up-skilling initiatives and the opportunity for economic arguments.” and Resilience Fund. An a better life.” academic by training, Migration of the Highly Skilled

He stresses that there is a compelling case for countries to counter intolerance towards migrants, especially when it comes to attracting highly skilled migrants. “For them it is not all about salaries, they are mostly after higher living and working standards, including good healthcare, educational opportunities for their children and, most importantly, a safe living environment.” According to Koser, countries that cannot get on top of xenophobia will simply lose out on the global competition for talent, because the people that they want to attract will simply not want to live in an environment that is hostile towards foreigners of all shades. So what can governments do to bring their people along? Koser says the issue for politicians is that “the topic of migration is almost toxic. The downsides for them are greater than the upsides”. He sees the reason for this in the fact that migration certainly costs in the short term, 94

Khalid is Professor of Conflict, Peace and Security at the University of Maastricht, as well as non-resident fellow at the Brookings Institution, Chatham House, and the Lowy Institute. As a global advocate for migrants and refugees, Khalid chairs the World Economic Forum Global Future Council on Migration, edits the Journal of Refugee Studies, and was appointed MBE for services to asylum seekers and refugees. He chairs the Board of Trustees for the sustainable development charity Raleigh International.

Making a Positive Impact

Besides, more research is required about ways to influence politics and perceptions that are clearly misinformed. “My advice would be to look to other areas of public policy and countries where confidence plummeted after a crisis. Take Japan, which managed to re-build confidence in its economy after the nuclear disaster.” Then there are other ways to bridge the gap between humanitarian and economic arguments, between burden and benefit. “Investment migration just accounts for a small percentage of overall migration, but it generates significant funds, which in part could be used to address some of the causes of migration such as famine, poverty and climate change.” It is unrealistic to believe that migration can be stopped completely, according to Koser. Therefore, it is important that countries find ways to cope with it, and investment migration can become part of the solution. n


INVESTMENT MIGRATION YEARBOOK 2019/2020

John Marcarian, Founder of Expatland Global Network

Expatland:

The World’s Most Influential Country

Expats may account for just 3% of the world’s population, but they are changing the world and reshaping societies — and their dominance is growing as expats are expected to account for a larger share of the world’s population in the decades ahead, says John Marcarian.

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f Expatland were a country, it would have a population of 244 million people, which would make it the fifth largest in the world. Expatland is growing at a fast rate of 300,000 people a month, and includes a mixture of nationalities: nine million Americans, three million Germans, and more than one million Aussies, to name a few. This virtual country is hosting the most productive citizens, which, according to John Marcarian “are the 3% changing the world”.

Expatland arose from John’s personal expat journey — a long-time expat himself, Marcarian understands that moving to a new country isn’t something that comes without challenges. With a mission to help facilitate a smooth transition into the new life of an expat, he wrote the Expatland book in 2015, with information and practical advice on taxes, education, cultural differences, retirement, and local laws.

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Supporting Expats

In 2018, Marcarian launched the Expatland Global Network, an organisation that provides a one-stop-shop for all the services an expat needs for a smooth integration, to support people who are looking to join the expatriate community in various cities and regions across the globe. The Expatland Global Network is made up of Expatland teams. E-teams consist of professionals who provide support, services and products, which fall into four categories: tax and finance; health and wellness; logistics; and lifestyle. Operating at a city level, each E-team operates under the leadership of a group leader, responsible for ensuring that a client has a good experience as he or she moves through the team, which delivers all the essential local knowledge relevant to a specific location. “Expatland is a free of charge service for the expat — our clients don’t even need to sign up to become a member, we simply introduce them to service providers, which then charge the usual fees,” Marcarian explains. “We launched Expatland less than a year ago and it has already spread to many global locations, with more than 16 E-Teams in Singapore, Sydney, Hong Kong, Los Angeles, Budapest, Frankfurt and London, amongst others, with a goal to have 50 E-Teams by the end of 2020,” Marcarian says. There are two types of Exapatland members: a global executive and a global founder establishing a company or moving a business across borders. “Our customer base is diverse, with clients coming from Europe, the Asia-Pacific, Africa and the US,” Marcarian says. “Potentially, I believe there can and should be a collaboration between Expatland and the RCBI industry, given that moving abroad for any reason necessitates the interaction between the expat and the local E-Team. I believe there would be demand, though we have not yet developed the channel.”

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Global Dominance

Expatriates contribute significantly to the countries they move to — the skills they bring, the taxes they pay, and the jobs they fill; these positive contributions to host economies cannot be ignored, and according to Marcarian, global growth rests on the shoulders of expats. “Expatriates bring with them a unique set of skills, international experience, and contacts, diversifying the local talent pool. In fact, our research reveals that immigrants add to the GDP of the country they are moving to regardless of their socio-economic status. In addition to contributing to economic output, expatriates have a strong impact on society as a whole,” he says. “Take Atlanta for example, there are 50,000 Germans living in the city. They brought their knowledge, skills and ideas, which means they affect local culture, food, and even the local way of doing things.” Future Outlook

John Marcarian is a chartered accountant, international tax advisor, and the founder of both CST Tax Advisors and Expatland. At CST, he provides tax consultancy to clients in multi-markets, including global expatriates and businesses moving across borders. Based on his knowledge of common expat issues and his own experience as a widely travelled Aussie expat, John wrote the Expatland guide book in 2015.

“Expatland is destined to grow with the potential to become the third largest country in the world,” says John Marcarian. The latest revised projection is that the number of international migrants will exceed 405 million by 2050, or nearly 7% of the global population — and Marcarian says he will not be surprised, as it seems that a recordbreaking number of people want to be expats: “Research from Gallup World Poll reveals that 750 million people around the world would move to another country if they could.” E-Teams have already been established in some of the top expat destinations, with many more cities launching in 2019. “Our network is growing quickly, and we are actively looking for new destinations to expand to, typically the top expat cities,” Marcarian says. So where do expats want to live? The answer is all over the world, but the richest metropolitan areas tend to attract a larger number of expats. “The majority of potential migrants would like to move to the US, followed by London and other bigger cities. However, a number of new locations emerged recently, including Austin, Abu Dhabi, and Doha — wherever you have a strong economy, you see expats being attracted.” “Overall, the rise of China has had a major impact on our members and the cities in which we are planning to expand our network. The Belt and Road Initiative spans all the way from China to Europe by land and by sea routes; it also includes countries like Sri Lanka and Kenya. It is bringing new investment and massive infrastructure projects that will transform the key locations, making them the most cosmopolitan and multicultural cities in the world,” Marcarian says. “However, if we look at the biggest market for us to develop, it’s definitely Africa. Africa holds much promise — it has arguably become the world’s most attractive investment destination, and African economies offer tremendous opportunities. We have just developed our first E-Team in Kenya, and potentially, there are 55 countries to look into in terms of company expansion.” n


INVESTMENT MIGRATION YEARBOOK 2019/2020

2019-2020

events CALENDAR OF UPCOMING

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EVENTS 2019-2020

Global Investment Immigration Summit 2019

The Investment Migration Forum

The Investment Migration Forum

DATE & V E NU E

DATE & V E NU E

03-06 June 2019 - Geneva

13-14 June 2019 - Beirut

ORGA NISE D B Y

ORGA NISE D B Y

The Investment Migration Council

Promoteam

WE B SITE

WE B SITE

investmentmigrationforum.org/

promoteam.me/rendez-vouz/ cbipf-beirut-2019/

2019 AILA/GMS Annual Global Immigration Forum

Caribbean Investment Summit 2019

D AT E & V E N U E

DATE & V E NU E

DATE & V E NU E

21 June 2019 - Johannesburg

16-18 June 2019 - Orlando

19-22 June 2019 - St. Kitts

O R GA N IS E D B Y

ORGA NISE D B Y

ORGA NISE D B Y

BLS Global

The American Immigration Lawyers Association (AILA)

Citizenship by Investment Programmes Association (CIPA)

W E BS ITE

events.citizenshipinvestment.org

IIA Autumn Conference D AT E & V E N U E

20 September 2019 - London O R GA N IS E D B Y

IIA W E B S ITE

iiaconference.com

WE B SITE

WE B SITE

agora.aila.org/Conference/Detail/1554

cis2019.events

Global Investment Immigration Summit 2019

Residency & Citizenship Conclave

DATE & V E NU E

21 September 2019 - India ORGA NISE D B Y

BLS Global WE B SITE

events.citizenshipinvestment.org 98

DATE & V E NU E

27-28 September 2019 - New Delhi ORGA NISE D B Y

GMN Media WE B SITE

www.citizenshipconclave.com


INVESTMENT MIGRATION YEARBOOK 2019/2020

The Global Citizen Forum D AT E & V E N U E

10-12 October 2019 - Yerevan O R GA N I S E D B Y

Arton Capital W E B S I TE

www.globalcitizenforum.org/yerevan-2019/

Residency & Citizenship Expo @ IREIS 2019 DATE & V E NU E

31 October - 02 November 2019 - Abu Dhabi ORGA NISE D B Y

Dome Exhibitions WE B SITE

China Offshore Summit DATE & V E NU E

12-14 November 2019 - Shanghai O RGA NISE D B Y

MX Media Group WE B SITE

shanghai.chinaoffshoresummit.com.hk/en/

www.citizenshipexpo.com

13th Global Citizenship Conference

Investment Immigration Summit Mumbai

D AT E & V EN U E

DATE & V E NU E

11-13 November 2019 - London

February 2020 - Mumbai

O RGA N I S ED B Y

ORGA NISE D B Y

Henley & Partners

Beacon Events

W E B S I TE

WE B SITE

www.henleyglobal.com/gcc2019-overview/

investmentimmigrationsummit.com/mumbai/

IIUSA EB-5 Advocacy Conference DATE & V E NU E

March 2020 - Washington O RGA NISE D B Y

IIUSA WE B SITE

iiusa.org/dc2019/

The Investment Migration Forum DATE & V E NU E

01-04 June 2020 O RGA NISE D B Y

The Investment Migration Council WE B SITE

investmentmigrationforum.org/

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Malta: An Investment Location for the Future Considered one of Europe’s best-kept secrets, many are still amazed to discover the plethora of benefits associated with investing and living in Malta.

Situated just off the European coast beneath Sicily, the small island of Malta has established itself as a leading financial center, offering foreign investors stability, security, and innovation. The Mediterranean island has experienced above-average economic growth in recent years, as investors and travelers alike tap into the island nation’s enormous potential. During the first half of 2018, Malta had the fastest growing economy in the Eurozone, boasting an economic growth rate of more than 5%. Considering this exponential growth and Malta’s incredible lifestyle benefits, an increasing number of people are looking to make greater investments in the island. Malta’s acclaimed citizenship-by-investment program offers investors the opportunity to obtain citizenship in exchange for a substantial economic contribution to the country and forge genuine links with the island.

Growth of real gross domestic product (GDP) in EU member states in the 3 rd quarter 2018 (compared to the same quarter of the previous year) Malta

3.6%

Romania

1.9%

Latvia

1.7%

Poland

1.7%

Slovenia

1.3%

Hungary

1.3%

Greece

0.8%

Denmark

0.7%

Bulgaria

0.7%

United Kingdom

0.0%

0.6% 0.5%

1.0%

1.5%

The MIIP has set the industry benchmark in terms of application processing, applying the world’s strictest due diligence standards and vetting of applicants. Each applicant and their included family members have to pass a strict four-tier due diligence process to ensure that all individuals entering Malta through citizenship-by-investment have no association with any criminal activities or form of corruption.

Location, location, location

The Maltese passport provides visa-free or visa-on-arrival access to over 180 destinations worldwide, including Australia, the USA, the UAE, Hong Kong, Japan, and all the countries in Europe’s Schengen Area. As a full member of the EU, the country also enables settlement in any other EU member state.

0.9%

Cyprus

Developed by the Government of Malta in partnership with Henley & Partners, the Malta Individual Investor Program (MIIP) is considered the most successful and credible citizenship program in the world. The minimum capital contribution for a single applicant is approximately EUR 1 million, which consists of a donation to the country’s development fund, a real estate purchase or rental, and an investment in government-approved financial instruments.

Malta is situated in the very heart of the Mediterranean ocean yet close to the European mainland, providing a perfect bridge between a secluded lifestyle and international access. Residents of Malta can enjoy the island lifestyle, surrounded by spectacular natural beauty, while still being within close reach of top business destinations.

1.0%

Ireland

Citizenship-by-investment gold standard

2.0%

2.5%

3.0%

3.5%

4.0%

Source: https://www.statista.com/statistics/263008/gdp-growth-in-eucountries-compared-to-same-quarter-previous-year/

With its strategic location, this small island nation has also established itself as an important shipping hub, granting easy access to Eastern and Western Mediterranean ports. Malta also boasts excellent flight connections and has a number of direct daily flights to Europe and North Africa. London is a short three-hour flight away, while the business hub of Dubai can be accessed in five hours.


Mediterranean lifestyle Malta is often referred to as an open-air museum and has a history that dates to 5,000 BCE — the island’s skyline is dominated by 16th-century architecture. The country is home to three UNESCO World Heritage Sites. Among them, its capital Valletta donned the illustrious crown of ‘European Capital of Culture’ in 2018. Along with its rich history, Malta offers 300 days of sunshine, sea-sculpted shores, and azure waters. The island’s lifestyle is modern and welcoming, and the influences of its location are evident in local food. Dishes feature a mix of Mediterranean cuisine with strong influences from Italy, created from fresh ingredients from the local land and sea.

A secure haven for your family An EU member since 2004, Malta provides its residents with the same benefits afforded to European citizens, such as access to the world’s best educational and medical facilities and security under the protection of the region’s strong legal system. Malta is considered one of the safest countries in terms of natural disasters and crime. According to the 2018 edition of the World Risk Report, the island nation ranks as the second safest in the world behind Qatar on the 172-nation ranking of disaster risks. The crime rate on the island is also almost non-existent. The country has earned a reputation for being highly family-oriented — many of its public places and establishments are welcoming of and cater for children. Malta has excellent local and international public and private education, with all schools teaching in English. The standard of health care in Malta is among the highest in the world, with a wide network of clinics and the renowned private Saint James Hospital servicing residents.

Thriving real estate industry

Future-facing investment destination

Malta’s real estate market has shown outstanding resilience during the 2008 global recession and continues to grow in sales. The purchase of real estate on the island archipelago is at an all-time high. During the first half of 2018, property prices in Malta increased more than any other country in the world.

In 2018, Malta became the first country in the world to establish a regulatory framework for blockchain technology. The island nation has also long been a front runner in the iGaming and fintech industries.

The increasing number of buyers looking to purchase real estate in Malta is driven by various factors, including the opening of branches of some of the world’s most influential financial institutions, online businesses, and reinsurance companies. Malta offers an abundance of property options, including apartments, maisonettes, ‘houses of character’, palazzos, villas, and bungalows.

An attractive place for business A flexible and highly trained multilingual workforce is one of Malta’s main assets and helps to ensure the country’s competitive edge through high-quality production at costs that are highly competitive in relation to the rest of Europe. Investors operating in Malta also benefit from easy access to European and Middle Eastern markets and the EU’s free trade agreements. Further bolstering Malta’s business appeal is its membership to the World Bank, the International Monetary Fund, the World Trade Organization, and the International Labour Organization. The Maltese government understands that a healthy private sector and an overall pro-investment climate contributes to the country’s sustainable development. To this extent, Malta Enterprise was created with an objective to support private businesses operating in the country, and its services are priceless to new investors entering the market. It provides assistance in data analysis, helps with identifying potential partners and clients, and guides investors through the legal system.

The country’s online gaming industry has shown impressive growth over the past few years, supporting local employment and bolstering revenue for the island. The sector accounts for a substantial part of Malta’s economy, contributing over 12% of the country’s overall GDP.

The global leader in investment migration Henley & Partners is the global leader in residence and citizenship planning. Our highly qualified professionals work together as one team in over 30 offices worldwide. With a local office in Malta, our experienced global team is best-placed to guide you through your citizenship-by-investment journey. The firm also runs a leading government advisory practice that has raised more than USD 8 billion in foreign direct investment. Trusted by governments, the firm has been involved in strategic consulting and in the design, setup, and operation of the world’s most successful residence and citizenship programs. For more information on acquiring alternative residence or citizenship, call +356 2138 7400, e-mail malta@henleyglobal.com, or visit henleyglobal.com


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INVESTMENT MIGRATION YEARBOOK 2019/2020

WHO’S WHO

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IM Yearbook connects you with the industry’s major firms, executives and professional advisers.


INVESTMENT MIGRATION YEARBOOK 2019/2020

Advisory & Legal ANZ Migrate...................................................................................................................................104 BEYOND Residence & Citizenship.........................................................................................104 Deloitte.............................................................................................................................................. 105 Deloitte LLP..................................................................................................................................... 105 Energopiisi S.A...............................................................................................................................106 Fidesco Trust Corporation.........................................................................................................106 Fragomen LLP................................................................................................................................ 107 GANADO Advocates.................................................................................................................... 107 Global Information Consulting Group (GICG)................................................................... 107 HAZELALLEYNE Law Office................................................................................................... 107 Henley & Partners.........................................................................................................................108 Integritas Group.............................................................................................................................108 Klasko Immigration Law Partners...........................................................................................108 L Papaphilippou & Co LLC - Advocates & Legal Consultants........................................109 La Vida..............................................................................................................................................109 PassPro Immigration Services...................................................................................................109 Rosemont International...............................................................................................................110 Rostova Westerman Law Group, PA.........................................................................................110 RSM Malta........................................................................................................................................110 Vanuatu Investment Migration Bureau....................................................................................111 Visas Consulting Group................................................................................................................111 Industry & Professional Association Investment Migration Council..................................................................................................108 KYC & Due Diligence BDO USA, LLC...............................................................................................................................104 Exiger.................................................................................................................................................106 Globe Detective Agency (P) Limited....................................................................................... 107 Refinitiv..............................................................................................................................................110 S-RM Intelligence and Risk Consulting Limited.................................................................110 Sterling Diligence............................................................................................................................111 Logistics Services DHL....................................................................................................................................................106 Marketing & Promotion CiviQuo Limited............................................................................................................................ 105 Media CountryProfiler Malta.................................................................................................................. 105 Investment Migration Insider....................................................................................................108 Programme Agency Citizenship by Investment Unit, Antigua & Barbuda........................................................104 Citizenship by Investment Unit, Government of St. Kitts and Nevis............................104 Citizenship by Investment Unit, Saint Lucia........................................................................ 105 Dominica's Citizenship by Investment Programme...........................................................106 Malta Individual Investor Programme Agency (MIIPA)...................................................109 Malta Residency Visa Agency...................................................................................................109

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ANZ MIGRATE ANZ Migrate, based in Singapore since 2003 provides immigration services to Australia and New Zealand. We support clients throughout Asia and around the world. We work with premier partners offering solutions for business development, property development, residential real estate, commercial real estate, managed funds and investment opportunities. We are owned and managed by a Registered Migration Agent for Australia (0428740) and Licensed Immigration Adviser for New Zealand (200800600). Our team speaks English, Mandarin, Cantonese, Bahasa Indonesia, Vietnamese, Burmese, Tagalaog and Khmer. JAMES ALAN HALL MANAGING DIRECTOR

LAURA AUSTIN HEAD OF INVESTMENT MIGRATION DUE DILIGENCE

HAKAN CORTELEK CHIEF EXECUTIVE OFFICER

1 North Bridge Road #23-07, 179094 - Singapore T:(+65) 6100 2878 E: info@anzmigrate.com W: www.anzmigrate.com Contact: James Alan Hall - Registered Migration Agent

BDO USA, LLC BDO delivers advisory services around the globe, and the Investigative Due Diligence Practice draws on deep experience to uncover risk and provide critical intelligence from our 1,500+ global offices in over 160 countries. We understand the need for the highest quality due diligence, conducted by our experienced investigators and expansive global network of resources. We also offer a proprietary monitoring solution, eConnaissance®, which is the first of its kind in the Investment Migration (IM) industry. BDO is a corporate member of the IMC and is actively committed to supporting IM programmes and their ability to positively influence the global community. With our international presence, outstanding reputation, industry expertise, knowledge of best practices, and advanced technology, BDO is unmatched in the IM industry as a leading provider of due diligence and monitoring services.

100 Park Avenue, New York, NY 10017- USA T:(+1) 212 885 7493 E: laustin@bdo.com W: www.bdo.com Contact: Laura Austin - Head of Investment Migration Due Diligence

BEYOND RESIDENCE & CITIZENSHIP BEYOND Residence & Citizenship houses leading specialists in the Immigrationby-Investment field. BEYOND’s seasoned, globally minded and locally connected professionals united in London over a decade ago to provide seamless service and successful outcomes for their clients. BEYOND offers multi-jurisdictional solutions worldwide with its extensive partnership networks. The team also engages in government advisory, education consultancy, international real estate and due diligence services. Leveraging core operations in Dubai, Hong Kong, London, Istanbul and Kiev, BEYOND has had extensive experience serving clients from Russia, China, Turkey, West Africa, the Middle East, South-East Asia and the Americas. By comprising the most globally aware and experienced team, BEYOND’s platform effectively serves direct clients and intermediaries in all Residency- and Citizenship-by-Investment programmes.

Dubai - United Arab Emirates T:(+97) 150 691 8860 E: hakan.cortelek@beyond-immigration.com W: www.beyond-immigration.com Contact: Hakan Cortelek - Chief Executive Officer

CITIZENSHIP BY INVESTMENT UNIT, ANTIGUA & BARBUDA The Antigua and Barbuda Citizenship by Investment Unit (CIU), is managed by a team of professionals and is responsible for processing all Citizenship by Investment applications, issuing Agent Licenses, approving Authorized Representatives, Projects and Business Investments. The ultimate responsibility of the CIP rests with the Office of the Prime Minister. www.cip.gov.ag Pavilion Drive, Coolidge, St. George’s - Antigua T:(+1) 268 481-8400 E: info@cip.gov.ag W: www.cip.gov.ag Contact: Charmaine Donovan -Chief Executive Officer

CHARMAINE DONOVAN CHIEF EXECUTIVE OFFICER

CITIZENSHIP BY INVESTMENT UNIT, GOVERNMENT OF ST. KITTS AND NEVIS Les Khan, PMP, MSOC, BBA, is Chief Executive Officer of the St. Kitts and Nevis Citizenship Investment Unit. He has over 20 years of experience with large financial organizations and risk management companies globally. Mr. Khan has been intimately involved in the revamping of the Citizenship by Investment Unit in St. Kitts and Nevis, and is an expert on citizenship programmes within the Caribbean. Mr. Khan has also led initiatives to automate the CBI programmes and has been instrumental in leading regional conferences, bringing representatives from the various regional CIU’s together with representatives from the US, UK, Canada, EU and the IMF. LES KHAN CHIEF EXECUTIVE OFFICER

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The Citizenship by Investment Unit, 1st Floor, Ministry of Finance Building, P.O. Box 597, Golden Rock - St. Kitts, West Indies T:(+1) 869 467 1474 E: ciuunitskn@gmail.com W: www.ciu.gov.kn Contact: Les Khan - Chief Executive Officer


INVESTMENT MIGRATION YEARBOOK 2019/2020

CITIZENSHIP BY INVESTMENT UNIT, SAINT LUCIA As the youngest Citizenship by Investment Programme (CIP) in the Eastern Caribbean, the vibrant island of Saint Lucia is committed to offering unique benefits with unmatched respect and integrity. Inheriting decades of knowledge and experience from our Caribbean neighbours, Saint Lucia has the privilege to employ the best industry standards and offer competitive advantages to our investors. Highly reputed for its ideal climate and quality of life, the investment programme to become a citizen of Saint Lucia is among the most attractive in the industry, offering a brighter future through our simple yet highly efficient and optimised application process. NESTOR ALFRED CHIEF EXECUTIVE OFFICER

YAKOF AGIUS FOUNDER & CHIEF EXECUTIVE OFFICER

CIVIQUO LIMITED CiviQuo is the world’s first residency and citizenship by investment e-marketplace. The platform brings together a large selection of programmes, licensed agents and intermediaries from around the world, enabling each to showcase their offering in a very simple, transparent and straightforward manner. Individuals interested in RCBI programmes do not need to browse through many different sites to find relevant information but can use CiviQuo as a resource to find information on programmes and service providers. A key feature of CiviQuo is that service providers who feature on the website need to disclose the professional fees they will be charging. Once clients have filed their RCBI application, they can also rate the service provider used. CiviQuo brings a new transparent formula that eases the process for individuals and transforms the way agents market themselves.

COUNTRYPROFILER MALTA LTD CountryProfiler (CP) is an international media company that specialises in the publication of country reports and investment guides on the world’s most innovative and high growth markets for trade, foreign investment and international financial services. CountryProfiler publications provide blue chip companies, their executive management and professional advisors with global business intelligence and market insight they require when managing cross border operations, investing or doing business with new markets. CountryProfiler’s publications are considered to be among the most prestigious economic intelligence products available. GARVAN KEATING CHIEF EXECUTIVE OFFICER

JURGA MCCLUSKEY PARTNER, HEAD OF IMMIGRATION

DELOITTE LLP Award-winning immigration expert with over fifteen years’ experience, Jurga McCluskey leads Deloitte’s UK immigration practice. Deloitte provides global immigration services to both corporate and private clients. The team comprises 170 experienced professionals, and is complemented by other member firms, covering over 151 countries, making Deloitte one of the largest immigration providers globally. Recommended advisor, Anthony Michael leads Deloitte’s Private Client immigration practice, which serves high-net-worth individuals and private businesses with their global immigration strategy. Anthony is assisted by Kathryn Crane who is an Associate Director in the team. The team provide dedicated end to end support for short term and long term visas, residence permits, permanent residence and citizenship applications.

(EUROPE AND THE MIDDLE EAST)

DELOITTE Deloitte Malta provides a market leading immigration service. Headed by UK Chartered Accountant Chris Curmi and former senior diplomat Jonathan Galea Deloitte’s dedicated multilingual immigration team offers an unparalleled level of experience and competence in representing clients in Malta. Deloitte Malta is not only a successful immigration practice in one of Europe’s most successful economies, with almost 500 professional staff it is a distinguished provider of audit, tax, consulting, financial and risk advisory services to an extensive array of international private and corporate clients. CHRIS CURMI DIRECTOR

5th Floor, Francis Compton Building Waterfront, Castries, LC04 301 - Saint Lucia T:(+1) 758 458 6050 E: info@cipsaintlucia.com W: www.cipsaintlucia.com Contact: Nestor Alfred - Chief Executive Officer

Aragon House, Level 1, Dragonara Road, St. Julians, STJ 3140 - Malta T:(+356) 2034 1608 E: info@civiquo.com W: www.CiviQuo.com Contact: Yakof Agius - Founder & Chief Executive Officer

64, St Anne Court, Flat 2, Bisazza Street, Sliema SLM 1642 - Malta T: +(356) 2034 2034 E: puglisevich@countryprofiler.com W: www.countryprofiler.com Contact: Melissa Puglisevich - Office Manager

2 New Street Square, London, EC4A 3BZ - United Kingdom T:(+44) 20 7007 7668 E: jmccluskey@deloitte.co.uk W: www.deloitte.co.uk Contact: Jurga McCluskey - Partner, Head of Immigration (Europe and the Middle East)

Deloitte Place, Mriehel Bypass, Mriehel BKR3000 - Malta T:(+356) 2343 2000 E: ccurmi@deloitte.com.mt W: www.deloitte.com/mt Contact: Chris Curmi - Director

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CHARLES SCHIAVONE

DHL DHL is the global market leader in the industry and “The Logistics Company for the World”. Our popular International Express door-to-door delivery service is available when you’re sending document or non-document shipments anywhere around the world. DHL Express remains a pioneer, constantly providing new solutions for its customers, solutions that make it the market leader. While maintaining the largest market share, DHL sets very high levels of service and always seeks to serve the customer in the best possible way. Having a constant presence in the Maltese market since 1983, DHL has acquired a deep knowledge of critical shipments as well as unparalleled experience in the specialised handling of express deliveries for each industry sector.

COUNTRY MANAGER

H.E. EMMANUEL NANTHAN

DOMINICA’S CITIZENSHIP BY INVESTMENT PROGRAMME Dominica’s Citizenship by Investment (CBI) Programme has a proud history of welcoming individuals and families to join their Global Community, and reap the benefits of what it means to be a Dominican. As one of the oldest economic citizenship offerings world-wide, the programme provides applicants with the prospect of greater mobility, wealth and freedom. Established in 1993, Dominica’s government legislated programme has cultivated a reputation for a smart yet simple approach, with streamlined processing and strong due diligence at the heart of the product. The Programme is officially administered by the Dominica Citizenship by Investment Unit (CBIU), adhering to the highest professional standards.

HEAD OF THE CITIZENSHIP BY INVESTMENT UNIT, DOMINICA

MARY TSIGANOU

ENERGOPIISI S.A. ENERGOPIISI S.A., a well-established investment consultancy with strong and long-term experience with international investors, provides integrated services including solutions for all legal, financial, tax or technical issues on your investment in real estate and the entire procedure for obtaining a residence permit. To date we have successfully assisted with over €190 million of foreign investments in Greece and have issued a remarkable number of residence permits, business visas and D-type investment visas. With a dynamic list of over 1,000 exceptional properties, we also manage a large number of properties, offering specific guaranteed income to investors. Trust us to handle your request from beginning to end.

VICE PRESIDENT/FINANCIAL & LEGAL CONSULTANT

KAREN KELLY

EXIGER Exiger is a global leader in delivering enhanced and automated due diligence, consulting and application process management solutions to CIUs, RIUs, governments, banks and corporations worldwide. A trusted provider to immigrant investor programmes since 2006, Exiger has partnered with many of the world’s largest and fastest growing global CBI and RBI programmes. Exiger’s AI powered automated due diligence solution, DDIQ, and applicant management system, Exiger Insight AMS, are changing the way CIUs and RIUs manage applicants and agents. Exiger has over 190 full-time research staff speaking over 30 languages in research centers in Washington, D.C. metro, Vancouver, Bucharest, London and Hong Kong.

DIRECTOR, STRATEGY & DEVELOPMENT

JOSEPH R.R. ESCHER MANAGING DIRECTOR

106

FIDESCO TRUST CORPORATION Based on a genuine interest in understanding client needs, Joseph Escher, the first director general of the Financial Services Department of Saint Christopher and Nevis, joined Fidesco Trust Corporation in 1998. With a proven expertise in the formation of Companies, Foundations, Limited Partnerships, and Trusts, Mr. Escher enjoys the unique opportunities for personal client interaction in the Citizenship advisory part of the practice. As authorised person for the Saint Christopher and Nevis Citizenship by Investment Program, Fidesco specialises in providing a discerning clientele with the chance to evaluate a new life path in the Caribbean’s longest running CBI offering. Regularly fielding direct enquiries and referrals from around the globe, Fidesco is always ready to assist.

MIA Cargo Village, Luqa, LQA 3290 - Malta T: (+356) 2180 0148 E: Charles.schiavone@dhl.com W: www.dhl.com Contact: Charles Schiavone - Country Manager

Citizenship By Investment Unit (CBIU) 1st Floor, Financial Centre, Ministry of Finance, Kennedy Avenue Roseau, Commonwealth of Dominica T: (+1) 767 266 3974 E: cbiusecretary@dominica.gov.dm Contact: H.E Emmanuel Nanthan - Head of the Citizenship by Investment Unit, Dominica

42, Amalias Avenue, 105 58 Athens - Greece T:(+30) 210 45 14 892 E: info@goldenvisa-greece.com W: www.goldenvisa-greece.com Contact: Mary Tsiganou - Vice president/ Financial & Legal Consultant

1095 Avenue of the Americas, 5th Floor, New York NY 10036 - USA T:(+1) 778 945 7318 E: kakelly@exiger.com W: www.exiger.com Contact: Karen Kelly - Director, Strategy & Development

The Sands Complex, Suit C23 George Street, Saint Kitts, KN 0106 - Saint Kitts and Nevis T:(+1) 869 466 6989 E: info@fidesco.com W: www.fidesco.com Contact: Joseph Escher - Managing Director


INVESTMENT MIGRATION YEARBOOK 2019/2020

NADINE GOLDFOOT

FRAGOMEN LLP Fragomen is the world’s leading exclusive provider of immigration services. With more than 50 strategically located offices worldwide, we provide immigration services in more than 170 countries. Our Worldwide Private Client Practice helps individuals—from investors, high net worth individuals and entrepreneurs to executives, professionals, artists, athletes, students and their families—to navigate and plan for their long and short-term movement around the world. Available in multiple countries, alternative citizenship and residency programmes promote economic growth through investment and offer immigration benefits to investors seeking to expand and secure their personal and financial security and stability, leverage global business opportunities and enhance their quality of life.

PARTNER

DR ANTHONY CREMONA PARTNER

ATEF EL KADI

GANADO ADVOCATES GANADO Advocates is a leading commercial law firm with a focus on the corporate, financial services, maritime/aviation, fintech/blockchain and private client sectors, servicing a broad international client base, consisting of HNWI’s, UNHWI’s, family offices, trustees and other fiduciaries, blue-chip and multinational corporations. The firm’s well-resourced and dedicated Private Client team provides unparalleled advice in various areas, from citizenship and residence (handling applications under Malta’s MIIP and MRVP from commencement to completion) to estate and succession planning, the setting up of trusts and foundations, tax advice and conveyancing. GANADO Advocates is the exclusive member firm in Malta for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+ countries worldwide.

GLOBAL INFORMATION CONSULTING GROUP (GICG) GICG is a multinational firm offering second citizenship and residency solutions as well as client advisory services to global High Net Worth Individuals. Established in 1996, GICG is a pioneer figure in the investment immigration industry, providing expert advices on regulatory and legal matters. Our dedicated team of 30 associates operates in four different continents with offices in Malta, Cyprus, Caribbean region, Turkey, Egypt, Montenegro and Moldova. GICG provides a complete service, taking full responsibility of the citizenship and residency application process, prioritizing confidentiality and personalized service. Our strong expertise has resulted in a 100% success rate in all applications made using our services.

DIRECTOR

SACHIT KUMAR

GLOBE DETECTIVE AGENCY (P) LIMITED GDA is the pioneer and leading private investigation firm in India, where it has been established for over five decades. Headquartered in New Delhi having a network of 20 branches, GDA specializes in Enhanced Due Diligence worldwide for the CBI/ RBI industry, which includes a detailed “deep dive” into a subject’s background to verify information and acquire any relevant inputs to fill gaps through onthe-ground resources. It also includes authentication of documents and global security checks with regard to subjects vis-a-vis sanctions, enforcements, watch lists and identification of politically exposed persons (PEPs). GDA’s highly skilled, professional approach is personalized and rigorous. GDA is aware that important decisions are made partly/wholly based on the information that we provide.

DIRECTOR

HAZELALLEYNE LAW OFFICE HAZELALLEYNE Law Office is a full service law firm and authorized corporate service provider located in the heart of Basseterre, St. Kitts that advises clients about a wide range of matters in a warm and friendly atmosphere. The Firm prides itself on delivering a high level of timely, efficient and professional service to all clients; regardless of the nature of the matter. Its two founders are Ms. Lisa Hazel–Claxton and Ms. Deniece Alleyne. They are called to the Bars of England and Wales and St. Christopher and Nevis. Ms. Hazel–Claxton is a Notary Public.

DENIECE ALLEYNE PARTNER

1st Floor, 95 Gresham Street, London EC2V 7NA - United Kingdom T:(+44) 2070 909 156 E: NGoldfoot@Fragomen.com W: www.fragomen.com Contact: Nadine Goldfoot - Partner

171, Old Bakery Street, Valletta, VLT 1455 - Malta T:(+356) 2123 5406 E: acremona@ganadoadvocates.com W: www.ganadoadvocates.com Contact: Dr Anthony Cremona - Partner

Villa Zimmerman, Maisonette no.2, Ta’Xbiex Terrace, Ta’Xbiex - Malta T:(+356) 2133 7030 E: info@gicg.net W: www.gicg.net Contact: Yanica Caruana – Senior Lawyer, Head of Malta Operations

601-603, Eros Apartments, 56, Nehru Place, New Delhi 110019 - India T:(+91) 931 104 2007 E: sachitkumar@globedetective.com W: www.globedetective.com Contact: Sachit Kumar - Director

Victoria Road, Basseterre, St. Kitts - West Indies T:(+1) 869 465 3986 E: info@hazelalleynelaw.com W: www.hazelalleynelaw.com Contact: Deniece Alleyne - Partner

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HENLEY & PARTNERS Henley & Partners is the global leader in residence and citizenship planning. Each year, hundreds of wealthy individuals and their advisors rely on our expertise and experience in this area. The firm’s highly qualified professionals work together as one team in over 30 offices worldwide. The firm also runs a leading government advisory practice that has raised more than USD 8 billion in foreign direct investment. Trusted by governments, the firm has been involved in strategic consulting and in the design, set-up, and operation of the world’s most successful residence and citizenship programmes. DR JUERG STEFFEN CHIEF EXECUTIVE OFFICER

FRÉDÉRIC VILLA MANAGING DIRECTOR

INTEGRITAS GROUP The Integritas Group is a multidisciplinary firm providing corporate services such as a company formation, company maintenance, corporate structures, mergers and acquisitions, redomiciliation, residence, citizenship, shipping and trust services to its clients. Integritas Corporate-Services Ltd is authorised to submit citizenship and residence application on behalf of applicants to the Maltese authorities, through its Approved Agents, Mr Frederic Villa and Dr Alexia Muscat. Mr Frederic Villa is also a member of the Investment Migration Council. Integritas Trustees Ltd is authorised by the Malta Financial Services Authority to provide trustee and fiduciary services. The Integritas Group was founded and is headed by Frederic Villa, a Swiss and Italian national. He speaks Italian , French , English, German and understands Spanish.

INVESTMENT MIGRATION INSIDER Investment Migration Insider is the #1 publisher for the investment migration industry. We are the news website of reference for the industry and home to the most trusted information on residence and citizenship by investment. Our readers are professionals from immigration companies, property developers, law firms, wealth advisories and family offices, as well as policy-makers, and even heads of state. We feature breaking news, commentary on current events, interviews with key figures, an extensive overview of relevant conferences, and the only job listing site dedicated exclusively to the CBI/RBI industry. Visit us on imidaily.com CHRISTIAN HENRIK NESHEIM FOUNDING EDITOR

INVESTMENT MIGRATION COUNCIL The Investment Migration Council (IMC) is the worldwide association for investor migration, bringing together the leading stakeholders in the field and giving the industry a voice. The IMC sets the standards on a global level and interacts with other professional associations, governments and international organisations in relation to investment migration. The IMC helps to improve public understanding of the issues faced by clients and governments in this area and promotes education and high professional standards among its members.

BRUNO L’ECUYER CHIEF EXECUTIVE

H. RONALD KLASKO MANAGING PARTNER

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KLASKO IMMIGRATION LAW PARTNERS Klasko Immigration Law Partners provides a full spectrum of immigration services to businesses, individuals, and organizations throughout the world. The firm is one of the largest and most respected immigration practices in the U.S., delivering cutting-edge immigration advice and representation to clients internationally. Klasko attorneys frequently lecture businesses, investors, agents, wealth managers, and other lawyers on the intricacies of immigration law. Klasko Immigration Law Partners is recognized for providing creative solutions to the most complex issues in immigration law. The firm has extensive experience working both with nonimmigrant investors applying for E-2 (treaty investor) and L-1 (intracompany transferee) visas, and with immigrant investors applying for permanent residence status through the EB-5 and EB-1-C programs.

20 Grosvenor Place, London SW1X 7HN - United Kingdom T:(+44) 207 823 1010 E: uk@henleyglobal.com W: www.henleyglobal.com Contact: Dr Juerg Steffen - Chief Executive Officer

114/3, The Strand, Gzira GZR 1027 - Malta T:(+356) 2385 0611 E: info@integritas-trustees.com W: www.integritas-trustees.com Contact: Frédéric Villa - Managing Director

Stendervegen 37, 5542 Karmsund - Norway T:(+34) 658 200 403 E: cn@imidaily.com W: www.imidaily.com Contact: Christian Henrik Nesheim - Founding Editor

16 Rue Maunoir 1211 Geneva - Switzerland T: (+41) 22 533 1333 E: info@investmentmigration.org W: investmentmigration.org Contact: Bruno L’ecuyer – Chief Executive

1601 Market Street, Suite 2600, Philadelphia, PA 19103 - United States T:(+1) 215 825 8600 E: info@klaskolaw.com W: www.klaskolaw.com Contact: H. Ronald Klasko - Managing Partner


INVESTMENT MIGRATION YEARBOOK 2019/2020

LEANDROS PAPAPHILIPPOU

L PAPAPHILIPPOU & CO LLC - ADVOCATES & LEGAL CONSULTANTS L Papaphilippou & Co LLC was founded in 1963. Through constant and consistent work, it is now one of the leading and most respectable law firms in Cyprus. The firm advises on cross-border mergers, acquisitions of companies, international liquidations, international civil and criminal litigation, establishment and protection of brands and intellectual property (IP), admiralty and shipping, banking and finance, competition, regulatory, fiduciary, immigration as well as international tax planning corporate and commercial and real estate. Our Immigration and Citizenship Department is well respected, and our lawyers provide structured and sound legal advice in relation to the acquisition, sale or lease of residential or commercial property.

MANAGING PARTNER

LA VIDA Based in London, UK, La Vida Golden Visas facilitates the acquisition of residency, immigration and citizenship through investment. We make what looks like an expensive and difficult option, affordable and complex free. With clients covering more than 60 countries worldwide and over 15 programme options, we understand your reasons and we have the best solution for your needs. Today’s Golden Visa has become an essential requirement for many high net worth families. Let us help you achieve your goals. Visit our website at www.goldenvisas.com for full details on the investment and real estate options available in the Caribbean, USA and Europe. PAUL WILLIAMS CHIEF EXECUTIVE OFFICER

MALTA INDIVIDUAL INVESTOR PROGRAMME AGENCY (MIIPA) Malta harbours the perfect ambience to relocate your business and settle down your family in a stable and prosperous country. The Malta Individual Investor Programme has been attracting successful and high-net-worth families to contribute positively towards the Maltese society. Malta has also been at the forefront of the Citizenship by Investment Industry and has worked closely with international institutions to ensure the programme gives the peace of mind to both the individuals applying and to all other related stakeholders.

JONATHAN CARDONA CHIEF EXECUTIVE OFFICER

MALTA RESIDENCY VISA AGENCY The Malta Residency Visa Agency is the Government entity responsible for managing and promoting the Malta Residence and Visa Programme. The programme grants beneficiaries from third countries (including non-Swiss and non-EEA) the right to settle permanently in Malta and travel across the Schengen zone visa-free. Beneficiaries can enjoy residency in a safe and stable country boasting excellent educational opportunities and economic prosperity. All applications submitted through accredited agents undergo a rigorous due diligence process to ensure that only fit-and-proper individuals are granted residency. CHARLES MIZZI CHIEF EXECUTIVE OFFICER

GISELLE BRU CHIEF EXECUTIVE OFFICER

PASSPRO IMMIGRATION SERVICES PassPro is one of the most respected Government Authorized Agents for second citizenship in the Middle East with a trusted reputation for providing ethical advice on the citizenship by investment programmes of Dominica, Antigua and Barbuda, St Kitts and Nevis, Grenada, St. Lucia and Cyprus. PassPro offers end-to-end application guidance – supporting with documentation, translation, attestation and legalization – and is highly experienced in dealing with complex applications of challenging nationalities. Our core team hails from the Caribbean and has processed applications covering more than 30 client nationalities over the course of their careers. Our experienced consultants possess specialized knowledge in real estate, regulatory compliance and financial due diligence and we visit our jurisdictions often, ensuring our clients always receive first-hand, up-to-date advice.

17 Ifigenias Street, 2007 Strovolos P.O. Box 28541, 2080 Nicosia - Cyprus T:(+357) 2227 1000 E: info@papaphilippou.eu W: www.papaphilippou.eu Contact: Leandros Papaphilippou - Managing Partner

Argyle House, Joel Street, London HA6 1NW - United Kingdom T:(+44) 207 060 1475 E: info@goldenvisas.com W: www.goldenvisas.com Contact: Paul Williams - Chief Executive Officer

Mediterranean Conference Centre, Old Hospital Street, Valletta VLT 1645 - Malta T:(+356) 2122 5232 E: info@iip.gov.mt W: www.iip.gov.mt Contact: Monica Farrugia – Chief Officer, Operations and Finance

Clock Tower, Level 1,Tigné Point, Sliema, TP 01 - Malta T: (+356) 2203 4000 E: customercare.mrva@mrva.eu W: www.mrva.eu Contact: Anthony Tomaselli Chetcuti – Client Relationship Manager

501, Al Habtoor Business Tower, Dubai – United Arab Emirates T:(+971) 4554 1449 E: info@passpro.co W: www.passpro.co Contact: Giselle Bru - Chief Executive Officer

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INVESTMENT MIGRATION YEARBOOK 2019/2020

REFINITIV Refinitiv is one of the world’s largest providers of financial markets data and infrastructure, serving over 40,000 institutions in over 190 countries. It provides leading data and insights, trading platforms, and open data and technology platforms that connect a thriving global financial markets community – driving performance in trading, investment, wealth management, regulatory compliance, market data management, enterprise risk and fighting financial crime. For more information visit: www.Refinitiv.com

PHIL COTTER MANAGING DIRECTOR

SIMON HUXFORD SOLICITOR

IRINA ROSTOVA FOUNDING PARTNER

DR TIMOTHY ZAMMIT TAX & IMMIGRATION LAWYER

ROSEMONT INTERNATIONAL Rosemont International provides an all-around multi-disciplinary and multijurisdiction private client and corporate service. We assist individuals and their families in structuring and administering their financial world in the best possible fashion. Professionally qualified and experienced staff can assist you, your family, and your business. Accountants, solicitors, notaries, trust and tax advisors can help guide you through the intricacies of the modern tax and estate planning requirements in the jurisdictions where you reside, operate and hold assets. We have first-hand experience of operational, regulatory and financial issues faced by entrepreneurs in practice and work accross civil law and common law jurisdictions. With offices in strategic locations (Monaco, Malta, Andorra, United Kingdom, Hong Kong, Singapore, Vietnam and Mauritius) we are able to offer an integrated service including residence and immigration support.

ROSTOVA WESTERMAN LAW GROUP, PA Rostova Westerman Law Group, P.A. is a U.S. immigration and nationality law firm with a focus on the EB-5 migration programme for investors. Our attorneys oversee hundreds of EB-5 petitions, have experience successfully appealing denials, litigating adverse decisions in federal court, and have vast experience in resolving complex admissibility issues for investors and their family members. Our firm represents investors from every continent and performs quality control checks of EB-5 filings prepared by other migration firms. Founding Partner Irina Rostova applies her background in banking and understanding of accounting principles and financial structures to her work with investors and is passionate about advocating for and promoting the EB-5 investor migration programme in Eastern Europe.

RSM MALTA RSM Malta is a member of RSM International, the seventh largest network of independent audit, tax and consulting firms encompassing 116 countries, 750 offices and 41,000 people internationally. In Malta, we employ a unique talent pool of over 190 staff in Audit, Business Advisory, Outsourcing, Immigration and Tax. We assist clients with their residence or citizenship by investment requirements, provide tax advisory and structuring, licensing, compliance and disruptive technologies related services. Our setup enhances business efficiencies, reduces internal bureaucracy and underpins our client focussed culture. It also assists our clients in readily connecting to partners providing leading advice and great value for money by understanding clients’ needs while helping to achieve them experience the power of being understood.

S-RM INTELLIGENCE AND RISK CONSULTING LIMITED S-RM is a global consultancy that helps clients manage regulatory, reputational and operational risks. Our proven expertise, natural curiosity and personal accountability delivers unequalled standards of service and advice across every sector in which we operate. This is supported by forward-looking, technologyempowered services that enable organisations and individuals to make informed decisions that minimise business interruption and unlock commercial opportunities in 140+ countries.

HEYRICK BOND GUNNING CHIEF EXECUTIVE OFFICER

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Refinitiv, 5 Canada Square, London E14 5AQ - United Kingdom T:(+44) 207 542 4356 E: Sylwia.wolos@refinitiv.com W: www.refinitiv.com Contact: Sylwia Wolos - Director, Enhanced Due Diligence

Le Monte Carlo Sun, 74 Boulevard d’Italie, MC9800 - Monaco T:(+377) 9777 4600 E: consulting@rosemont.mc W: www.rosemont.mc Contact: Simon Huxford - Solicitor

4901 NW 17th Way Suite 303 Ft. Lauderdale, FL 33309 - USA T:(+1) 786 408 3183 E: admin@usainvestorvisas.com W: www.usainvestorvisas.com Contact: Irina Rostova- Founding Partner

Mdina Road, Zebbug ZBG 9015 - Malta T:(+356) 2278 7000 E: timothy.zammit@rsm.com.mt W: www.rsm.com.mt Contact: Dr Timothy Zammit – Tax & Immigration Lawyer

4th Floor, Beaufort House, 15 St Botolph St, London, EC3A 7DT - United Kingdom T:(+44) 207 495 9140 E: info@s-rminform.com W: www.s-rminform.com Contact: Nick Thorley - Director


INVESTMENT MIGRATION YEARBOOK 2019/2020

MELISSA KELLEY-HILTON

STERLING DILIGENCE Sterling Diligence, formerly Bishops, is a leading global investigations, corporate due diligence, and executive screening firm. Ethical, discreet and trusted by leading Fortune Global 500 companies, we partner with each client to ensure our engagement results in timely and relevant information on a global scale. Our dedication to providing reliable, transparent, and actionable results, equips clients with the right information to make key strategic business decisions. Sterling Diligence has extensive resources in over 190 countries and territories with in-market resources. Our team of diverse professional investigators and award-winning executive leadership combined with our cloud solution, Sterling GlobalIQ, provides unparalleled expertise.

PRESIDENT

VANUATU INVESTMENT MIGRATION BUREAU The Vanuatu Investment Migration Bureau (VIMB) is a global network of government authorized representative offices for the promotion of Vanuatu’s Citizenship by Investment Programme – the Vanuatu “Development Support Programme” (DSP). VIMB has assembled an unrivalled team of experts to provide the highest levels of service and reliability for agents and applicants to apply for citizenship with complete peace of mind. Headquartered in Vanuatu and operated internationally by Vanuatu citizens who know and understand the DSP intimately, VIMB is the primary global distributor of the Vanuatu Citizenship by Investment Programme. JAMES ELCOCKE-HARRIS CHIEF EXECUTIVE

VISAS CONSULTING GROUP Visas Consulting Group (VCG), one of the most prestigious immigration firms in China, has been dedicated to the achievement of the immigration dream of the wealthy elites since 1997. With the assistance of VCG, thousands of families not only successfully acquire the residency in their desired destination but also swiftly fit into the new life. In the wake of the fourth wave of Chinese emigration, Visas Consulting Group has become a comprehensive overseas service provider that can take care of the client’s life in every aspect. Staying true to its motto: “Visas to Your Future”, VCG is ready to keep you company during your emigration journey at every step. DAVID CHEN EXECUTIVE DIRECTOR & MANAGING PARTNER

One State Street Plaza 24th Floor, NY 10004 - New York T:(+833) 231 5766 E: melissa.kelley-hilton@sterlingdiligence.com W: www.sterlingdiligence.com Contact: Melissa Kelley-Hilton - President

B&P House. Lini Highway, Port Vila - Vanuatu E: info@vimb.vu W: www.vimb.vu Contact: James Elcocke-Harris - Chief Executive

29/F Huaihai Plaza, 1045 Huaihai Road Central, Shanghai, 20031 - China T:(+86) 21 6415 8666 E: dchen@visas.to W: www.visas.to Contact: David Chen - Executive Director & Managing Partner

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For over 20 years, Henley & Partners has worked closely with governments to pioneer citizenship-by-investment programs, including the Malta IIP, which today is the world’s leading program. Malta offers safety and security by providing a better quality of life and the right to live, do business, and study in all EU member states. +356 2138 7400 | malta@henleyglobal.com

Antigua · Australia · Austria · Canada · Croatia · Cyprus · Dubai · Greece · Grenada · Hong Kong · Jersey · Latvia · Malaysia · Malta · Moldova


Secure your family’s future with Maltese citizenship

Define your Future Montenegro · Philippines · Portugal · Singapore · South Africa · South Korea · St. Kitts · St. Lucia · Switzerland · Thailand · United Kingdom · Vietnam


Due Diligence at Your Fingertips

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Investment Migration 2019  

Investment Migration 2019