FOR ALMOST as long as it has been accepted in China that “to get rich is glorious”, it has also been known that to get out can be glorious, too. The urge felt by many newly well-off Chinese citizens to emigrate has been a big reason for the growth of “investment migration” businesses. According to the Investment Migration Council, a lobby for the industry, more than 80 countries, including most of the world’s richer ones, offer schemes in which
FOR ALMOST as long as it has been accepted in China that “to get rich is glorious”, it has also been known that to get out can be glorious, too. The urge felt by many newly well-off Chinese citizens to emigrate has been a big reason for the growth of “investment migration” businesses. According to the Investment Migration Council, a lobby for the industry, more than 80 countries, including most of the world’s richer ones, offer schemes in which fast-track residence rights (“golden visas”), or even citizenship (“golden passports”), are available to foreigners who invest large sums. The most popular programme has been America’s, where the waiting list for Chinese applicants reached some 15 years in 2022. For small countries such as Vanuatu and St Kitts and Nevis, citizenship-by-investment schemes are important sources of foreign exchange.
China is the biggest source of demand, but far from the only one. People all over the world want to move countries—to flee persecution, political instability or, in some cases, justice. More prosaically, many simply hope to secure a better education for their children or to work somewhere with a pleasant climate and good cuisine. The money they bring to their host countries seems to make such arrangements a win-win. Yet, as the closure in recent years of a number of schemes demonstrates, they are highly controversial.
The latest country to shut its doors is Australia: in January 2024 it scrapped its scheme, offering permanent residence to foreigners who, for example, invested at least A$5m ($3.3m). Thousands have been issued since the visa was introduced in 2012, with most going to Chinese citizens. However, the scheme has been criticised for fostering corruption. Similar fears in Britain—focused on Russian rather than Chinese criminality—led to its ditching its “Tier-1” visa for wealthy foreigners in 2022 just before the invasion of Ukraine. Ireland closed a similar programme in February 2023. The European Commission and the OECD, a rich-country think-tank, have long worried that golden visas provide cover for money laundering. Those fears are not without foundation. In Greece, for example, Chinese investors were in 2018 accused of complicity in a scam in which a Greek developer bought properties at market value and sold them at a big markup to would-be investment migrants in China and then partially reimbursed them.
Critics also argued that the Australian scheme’s economic benefits were dubious. Most of the immigrants who arrived on these visas were not young. A report in 2022 by the Grattan Institute, a think-tank in Melbourne, found that they would therefore spend fewer years in the workforce before retirement than other migrants, and so pay tax for fewer years before beginning to draw heavily on government-provided services.
In other countries, the investment itself has sometimes been seen as a problem. In most schemes, property purchases qualify as investments, which can cause resentment. In February 2023 Portugal announced the closure of its golden visa scheme as part of a package of measures designed to tackle its housing crisis. Foreign purchases were blamed for pushing the cost of buying or renting property out of the reach of many locals. A revised scheme came into effect in October: investment in property or property funds no longer qualifies.
In every country the question of who has the right to live there is a sensitive one. But for the European Union (EU) in particular golden visas raise fundamental issues. They touch on one of the most “national” of competencies—who lives in a country—yet, because of the Schengen arrangements, have union-wide consequences. So there has been a prolonged tussle between Brussels and the countries offering visas and passports in return for investment.
In 2022 the European Parliament called for an outright ban on golden passports and the imposition of strict rules on golden visas. On passports, Brussels seems to be winning. Malta is now the only EU country still to offer full citizenship by investment. On visas, too, things are getting tougher. Spain is facing calls to drop its scheme, which allows permanent residency after ten years. In 2023 Greece doubled the minimum investment under its scheme to €500,000 ($543,000) in some of the more popular parts of the country, but opposition parties still claim it is the world’s most popular and want it closed. As Australia shows, the desire to tighten such rules extends well beyond the bloc’s borders. Money can still buy you a visa, and even a passport in some places. But the world’s footloose rich are finding it can’t buy you love.
© 2023, The Economist Newspaper Limited. All rights reserved. From The Economist, published under licence. The original content can be found on www.economist.com
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