UK emerging as a destination of choice for Chinese investors
There is a growing trend among China's richest to use their wealth to move themselves and their families abroad. This is done primarily in the form of investment visas. However, wealthy Chinese hoping to move abroad have overwhelmed the immigration departments of both Canada and the US this year.
Canada cancelled its investment visa programme earlier this year after the process became overrun by Chinese applicants, with wait times as long as five years. The programme had granted visas to those who lent 800,000 Canadian dollars (US$734,245) interest-free to one of the country's provincial governments. However, the Canadian government said the program significantly undervalued Canadian permanent residency and, with the ending of the programme, cancelled an estimated 48,000 applications made by mainland Chinese with the Canadian consulate in Hong Kong.
Meanwhile, fuelled by demand from wealthy Chinese nationals, the US EB-5 visa programme – which grants US visas to those who invest US$500,000 in a range of development projects and create at least 10 jobs within two years of their arrival – has, for the first time in its 24-year history, now run out of its allotment of visas, prompting warnings of a backlog and delays of between three and five years to obtain an EB-5 in the years ahead.
The US visa programme has also been the subject of allegations of abuse. In February 2013, the Security and Exchange Commission filed a lawsuit against a Chicago-based regional centre owner who is charged with attempting to defraud more than 250 investors, mostly Chinese, of investments worth more than 150 million U.S. dollars. Most recently, hundreds of foreign investors including 120 Chinese failed to get their green cards after pouring substantial sums into a beef processing factory in South Dakota through an EB-5 project.
The long delay in obtaining US visas, concerns about fraudulent practices and the closure of the Canadian programme are driving many Chinese to seek alternative destinations.
Australia is emerging as a landing spot for the extremely wealthy, after the country launched its Significant Investor Visa programme in November 2012, which grants residency visas to those who are able to place 5 million Australian dollars (US$4.7 million) into a government-approved investment. However, compared with other programmes, Australia's Significant Investor Visa programme is expensive and visa processing can take up to 3 months.
The United Kingdom, meanwhile, is fast emerging as a destination of choice for the estimated 1 million Chinese millionaires. With its stable and democratic political system, internationally renowned schools and universities, clean environment and cosmopolitan society, the UK has always ranked as a preferred destination amongst the Chinese. However, for those with money to invest abroad, its investment immigration programme is what really sets it apart.
Under the Tier 1 Investor visa scheme, £1 million (US$1.6 million) of investment in the UK will buy permanent residency in the UK after 5 years and British citizenship 12 months later. Applicants must invest a minimum of £750,000 (US$1.2 million) in government bonds or UK companies, but the remaining £250,000 (US$ 400,000) can be held as cash on deposit or used to purchase residential property. For the very wealthy, an investment of £5 million (US$8 million) can lead to settlement in the UK after 3 years, whilst an investment of £10 million (US$16 million) can lead to indefinite leave to remain after 2 years. Importantly, there is no cap on the number of Tier 1 Investor visas that can be granted in any given year and 97% of Tier 1 Investor visa applications are decided within just 30 days.
For wealthy Chinese looking to move themselves and their families abroad therefore, the UK's investor visa offers permanent residence on the basis of a substantially lower investment than Australia's Significant Investor Visa and without the delays and backlogs experienced by the Canadian and the US investment immigration schemes.
For advice or assistance with preparing an application for entry clearance, leave to remain or settlement in the UK in the Tier 1 Investor category, contact our immigration barristers in London.