Ireland, Portugal close door on emigration path for rich Chinese

February 27, 2023 09:26
Downtown Lisbon (Photo: Reuters)

The governments of Ireland and Portugal have closed the door on an emigration route popular with wealthy Chinese, by ending new applications for their Golden Visa programmes.

Under the programmes in the two countries, which began in 2012, applicants invested between 400,000 and two million euros, to enable them to apply for permanent resident status.

Announcing the decision on February 14, Simon Harris, Ireland’s Minister of Justice, said that the Immigrant Investor Programme (IIP) had since its inception brought in approved investment of almost 1.252 billion euros, which had benefitted many enterprises, including social and community organisations. The beneficiaries included Trinity College Dublin, University College Cork and housing charities iCare and the Peter McVerry Trust.

“The IIP was established over a decade ago during a time of unprecedented economic difficulty to stimulate investment in Ireland that would be of strategic and public benefit to the state,” said Harris.

“We have taken on board a number of reports and findings from international bodies such as the EU Commission, Council of Europe and OECD on similar investment programmes. Taking all of this into account and informed by both internal and external reviews, I have recommended that it is now timely to close this Programme to new applications, from close of business on 15 February,” Harris said, adding that about 1,500 existing applications would still be considered.

Wealthy Chinese accounted for the vast majority of applicants. In 2021, the government granted 251 Chinese applications and only 13 others. In 2022, the figures were 282 Chinese, 10 from the U.S. and 14 from the rest of the world. Of the total of 1,547 applications approved until June 23 last year, 1,458 were from Chinese.

So why the change of heart? First, the Irish economy is in much healthier shape today than in 2012 and not short of capital. Second, officials told the minister that due diligence on many Chinese applications had become extremely difficult. Some had no investment strategy and created few jobs. Applicants knew next to nothing about Ireland but followed the advice of intermediaries.

In addition, in 2022, the European Commission called on EU governments to end national programmes to sell citizenship to investors, which it had long considered a security risk.

In March last year, EU Commissioner for Justice, Didier Reynders, said: “European values are not for sale. We consider that the sale of citizenship through ‘golden passports' is illegal under EU law and poses serious risks to our security. It opens the door to corruption, money laundering and tax avoidance. All Member States concerned should end their investor citizenship schemes immediately”.

Among the applicants to Ireland was Mr Zhu, a real estate agent from Qinhuangdao in Hebei province. “I want to leave China,” he said “I will sell my properties here to raise the money. I hear that the Irish education system would be good for my son. An agent recommended the Golden Visa scheme in Ireland.” Zhu does not speak English and has never been to Ireland.

On February 16, Portuguese Prime Minister Antonio Costa announced that his government would stop issuing new Golden Visas in order “to fight against price speculation in real estate.” Known officially as residence permits for investment, they were issued in exchange for property purchases of 500,000 euros or more. Since 2012, the scheme has brought 6.8 billion euros in investment into Portugal.

According to government figures, more than 5,000 visas went to Chinese, more than 1,000 to Brazilians and 500 to citizens of Turkey, South Africa and United Arab Emirates.

The main reason for the change is Portugal’s housing crisis. Many local people cannot afford to buy property, especially in Lisbon and Porto, the country’s two biggest cities and the most popular choices for Golden Visa investors.

The closing of applications was one of a series of measures called “More Housing” approved by the Portuguese cabinet on February 16 to combat rent price speculation. Officials have said that the Golden Visa programme was not the principal factor behind rising housing costs but that ending it was symbolically important.

The next country to follow the example of Ireland and Portugal may be Spain. In February this year, the centre-left political party, Mas Pais, has submitted a bill to the Congress to scrap the Golden Visa scheme through purchase of property, saying that it had driven up housing prices and was not beneficial to the economy.

Other EU countries offering a residence permit to non-EU nationals are Italy, Malta and Greece. These schemes all have the benefit that the applicant does not need to move to the country. So Chinese can continue their lives and run their businesses in the mainland.

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A Hong Kong-based writer, teacher and speaker.