Global wealth migration supercharged by Asian HNWIs

August 31, 2021 08:47
More than 4,000 HNWIs left Hong Kong in 2019 alone. Photo: Reuters

Asia’s booming economic growth and prosperity of the past few decades has produced countless wealthy individuals and families. According to Capgemini’s 2021 World Wealth Report, the number of high-net-worth individuals (HNWIs) in Asia-Pacific doubled in ten years, reaching 6.9 million in 2020 despite the ongoing COVID-19 pandemic. The region’s sustained wealth accumulation is driving demand for wealth-related services, from personalized advisory that supports their global lifestyle, to solutions that increase their global mobility.

While the pandemic disrupted international travel, it did little to slow the accelerating trend of global wealth migration. A survey by a property consultancy found that one in four HNWIs intend to apply for Residency or Citizenship by Investment (RCBI) programs. Indeed, Asia’s wealthy individuals and families are predisposed to acquiring permanent residence or citizenship from a desired destination country, as they see it as an invaluable intangible asset that enables access to better business opportunities, improved freedom of movement, or enhanced healthcare and education. For many, obtaining residency and citizenship through investment is intrinsic to their wealth planning and lifestyle improvement.

Rising Demand from China and Hong Kong

For years and counting, Mainland China has been the single largest HNW migration market, with more than 16,000 HNWIs immigrating overseas in 2019. Every year, around 2% of the HNW population in China migrate overseas, seeking international asset allocation and residency in addition to the traditional demand for education, welfare, and global mobility. While the United States and Australia remain the long-running popular destinations for Chinese HNWIs, simmering geopolitical tensions may have impacted the appetite for these countries and shifted the demand to other locations such as Singapore, Portugal, and Greece.

In Hong Kong, citizens have always enjoyed excellent mobility with the Hong Kong SAR passport, and traditionally retained a mild interest in investing or obtaining residency in popular destinations such as the United Kingdom, Canada, Australia, and the United States. But this immigration landscape has changed substantially in recent years amidst the city’s unfolding socio-political developments. More than 4,000 HNWIs left the city in 2019 alone, and many more are weighing their options for the future through RCBI programs, prompting stronger demand for investment immigration services for years to come.

Prospective Immigrants Spoilt for Choice

It is therefore not surprising to see countries around the world competing over Asia’s wealth and talent with offshore residence and citizenship. From emerging entrepreneurs to families with younger children, the pandemic has not dampened HNWIs appetite for investment immigration, as they continue their search for practical benefits and safeguards to protect themselves and their family. Whether it be European Golden Visas through investment or entrepreneur or start-up visas offered by the “Big 5” immigration destinations of the US, UK, Canada, Australia and New Zealand, HNWIs in Asia are spoiled for choice.

The wide array of investment immigration programs on offer to Asian HNWIs all differ in their criteria, ranging from minimum investment value, investment duration, residency duration, to other policy requirements or limitations. Therefore, it is vital for HNWIs and families to thoroughly understand their desired needs and wants before embarking on the significant undertaking of relocating themselves and their assets to a new country.

There are broadly two types of investment immigration solutions for HNWIs to consider: passive and active investment programs. Passive programs such as government-approved real estate investments are ideal for those looking to keep their assets safe or secure more flexibility for the future. Meanwhile, active programs are best suited for entrepreneurial-minded HNWIs who intend to establish and operate a business that can generate economic benefits.

Traditionally, Hong Kongers sought after active investment residency programs offered by the “Big 5”. In comparison, Mainland Chinese HNWIs tend to prefer passive investment programs and have a stronger appetite for quick access to mobility, especially Caribbean passports that enable visa-free access to popular destinations including Hong Kong, Singapore, and the European Union. Coinciding with the recent surge in demand for immigration solutions and increasing desire by Hong Kong HNWIs to obtain a second citizenship, Grenada and Turkey’s passive investment immigration programs have become popular in the past 18 months due to their relatively simple application procedures.

Beginners Beware

Migrating to a new country is a life-changing decision that leaves no room for error. Investment immigration is an intricate process that involves careful thought and thorough preparation by the applicant, assisted by pre-screening and due diligence efforts by independent third-party professionals, to ensure adherence to the stringent requirements set out by immigration authorities around the world. Prospective applicants who act on flawed advice or mishandle the application process risk facing significant consequences that could potentially upend their life plans. There have been countless cases where applications have been denied as a result of failing to understand the “spirit” of the program, or simply improper paperwork.

The unprecedented and wide-ranging impact of the pandemic, from remote working to travel restrictions and lockdowns, have motivated many wealthy individuals to rethink their contemporary lifestyle and to pursue and build a more resilient one for the future. As the world learns to live with the virus, more countries will consider offering investment immigration programmes to attract Asian capital and talent to contribute to the post-COVID economic recovery, supercharging the industry and the migration of wealth across the globe.

-- Contact us at [email protected]

Worldwide Managing Partner & Founder, Harvey Law Group