Investment migration is growing at an unprecedented rate. But what is it exactly, why would anyone want it?
Henley & Partner’s paper, “A Guide to Investment: Migration for Governments and Global Citizens” discusses investment migration in-depth. You should check it out if you want to learn more about investment migration.
Here, we tackle the paper’s key points.
What is investment migration?
Investment migration refers to programmes which grant residence or citizenship rights to individuals in exchange for investing substantially to the host country.
For instance, the US’s EB-5 Immigrant Investor Program offers a permanent residence status for those who will invest a substantial amount which will lead to job generation. The new rules of this program will set this investment amount to US$ 900,000 to US$ 1.8 million.
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How does it benefit investors?
By gaining citizenship or residency, individuals gain a form of futureproof for their investments and assets. Henley & Partners cites the following key benefits:
- Expanded global mobility and frictionless travel to a wider number of countries
- Personal security for individuals in times of civil unrest, conflict, and terrorism
- Access to career, educational and cultural opportunities on a global scale
- Ease of global asset diversification
- Reduction of exposure to country-specific risks and volatility
In a nutshell, investment migration serves as a protection to risks that is related to being tied to a single citizenship. This is an attractive notion a lot of investors would want for themselves.
How does it benefit host countries?
Meanwhile, Henley & Partners mentioned the following benefits of offering investment migration programmes:
- Economic growth and job creation
- Increased tourism
- National debt reduction
- New skills and expanded global network
- Real estate sector growth and associated construction industry expansion
- Infrastructure development
With capital coming in, there is a lot countries can do. Investment migration removes the limits of growth of countries imposed by being bound to their territories. In April 2019, Bloomberg reported that Singapore was investing huge sums of money into a state-of-the-art trading hub.
What are the challenges it poses?
Some challenges that come along with the growth of the investment migration industry are as follows:
- It has attracted poorly-run and experienced companies drawn by the rewards of investment migration.
- The media attention such companies will attract gives the industry a bad reputation.
- The rise of nationalist and anti-immigration attitudes could lead to these programs being curbed.
How does the industry stay on top?
The investment migration industry should also future proof itself. While huge amount of capital is a good thing to have, self-regulation is a must. Monitoring and background checks of investors is imperative to maintain the good reputation of these programmes.
Internally, these industries must also practice transparency in order to establish and maintain the trust of the citizens.
Our world is going global in more ways than one, breaking the tradition of constraining ourselves to our home countries.
With the wide array of benefits the investment migration industry can offer us, some textbook practices need to stay intact — diligence, regulation, transparency, and proper governance.
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