In the 12/13/14 New York Times article, Some of the Rich Collect Art, Others collect Passports, author Robert Frank confirms that along with stocks and bonds portfolios the global rich are buying a new form of economic security: “passport portfolios.”
Wealthy investors from emerging markets: China, Russia, Middle East are shopping for passports in US, Europe, Canada and Australia as a hedge against their own volatile countries for “a second option in a more stable country”. Experts state that these “Economic Citizens” are spending $2B per year on 2d/3d passports and visas.
Governments around the world have commenced an “arms race” for “VIP Visas”, offering ever-faster residences and passports for ever higher prices. In 2013 Australia, Canada, Britain and other countries, raised the prices for “Golden Visas” and created a new fast lane for citizenship.
Current Investor Visa Program offers residency for 2m pounds ($3.14m). Applicants are eligible for “indefinite leave to remain” after 5 years. In 2014, Britain added a “Fast Track Program” i.e. 5m pounds ($7.85m, 3 year wait), 10m pounds ($15.7m, 2 year wait). 1/2 the visas go to Russians and Chinese.
Current Investor Visa Program “Golden Visa” i.e. “Significant Investor Visa offers permanent residency after 4 years in exchange for an investment of 5m Australian ($4.15m). More than 436 visas have been granted under this program bringing in more than 2B Australian dollars in investments. In 2014 Australia announced plans for a Premium Investor Visa i.e. “Platinum Visa” offering a faster residency (12 mos.) for 15m Australian dollars ($13.28 m).
In 2013 Canada terminated its investor visa program (800,000 Canadian dollars) and will revive it for double the amount (1.6m Canadian dollars) leaving 65,000 Chinese investors “hung out to dry”.
In 2014 Malta started selling citizenship for 1.15m Euros (approx, $1.4m US) which include the fee (650k Euros), and investment in real estate (min. 350k Euros), and Gov’t bonds (min. 150K Euros). Since Malta is in the EU, citizenship gives holders the ability to travel and settle within the EU 28 countries. In the first 6 months more than 200 investors signed up.
In the United States the EB-5 Visa program in 2014 hit its cap of 10,000 Visas for the first time since 1990 (more than 80% of the apps went to the Chinese).
For those investors who value the safety of the US financial system, access to capital markets, high quality education for their family and lifestyle benefits including environmental protections (unlike China which suffers from vast water and air pollution), freedom to travel among 50 states and a transparent democracy with a $17 trillion GDP, the U.S. EB-5 program is unparalleled.
Experts say that the $500k investment level set in 1990 should be raised to reflect the economics of VIP visas.
Stephen W. Yale-Loehr, atty at Miller Mayer (Law Prof. at Cornell Univ. Law School) said, “I think after 24 years its appropriate for Congress to consider adjusting that level.”