- According to Henley & Partners, “investment migration” has become “mainstream” in the past five years.
- The firm sees growing interest in migration programmes among Chinese, Filipino and Bangladeshi HNWIs.
The recent impeachment of President Park Geun-hye and the Samsung bribery scandal may have prompted more South Korean millionaires to consider relocating in Singapore, says Dominic Volek, who heads the Southeast Asian division of the global citizenship and residence advisory firm, Henley & Partners.
He explains that the scandal that brought down Park and the ruling party, and engulfed officials and business leaders alike, has posed some “very real concerns” for the firm’s South Korean clients.
The firm currently has over 25 offices worldwide and services a predominantly high net worth and ultra-high net worth client base.
Volek says the bulk of South Korea’s migrating millionaires are drawn to Singapore’s stable economy, and highly-rated healthcare and education system. It is considered a safe place to live and raise children. More importantly, it boasts an attractive tax regime, making it a very highly attractive jurisdiction for investments.
Residence and citizenship by investment
The concept of residence and citizenship planning was created by Henley & Partners in the 1990s. As globalisation expanded, residence and citizenship have become topics of significant interest among a growing number of internationally mobile entrepreneurs and investors.
- Residence by investment – an individual or family invests into a certain country to gain residency. This can be a sensible proposition for those living in countries with limited options for tax and estate planning, or those living in countries with unstable political or economic situations.
- Citizenship by investment – an individual or family aim to acquire citizenship in another country for financial, security or lifestyle purposes by significantly investing or contributing to that country.
The U.S. and U.K. have traditionally attracted the highest number of wealthy migrants, and continue to be seen as highly desirable destinations for foreign millionaires. According to CNN Money, Australia and Canada are also seeing large inflows of HNWIs.
Meanwhile, wealthy entrepreneurs who wish to make Singapore their home may consider investing in its Global Investor Programme (GIP) scheme, which requires a minimum investment of S$2.5 million, at least three years of business or entrepreneur track record, and a minimum turnover of at least S$50 million per annum on average for the last three years. An investor also needs to have at least 30% shareholding in the company if it is privately owned.
Growing migration interest among Chinese, Filipino and Bangladeshi HNWIs
According to Volek, “investment migration” has become “mainstream” over the past five years.
With disruptive global events like Brexit and the US Administration under President Donald Trump, more and more wealthy global families and investors are starting to look towards other countries to gain residency for education, financial freedom and security purposes.
“Chinese investors typically dominate any migration programme,” Volek says. Within Southeast Asia, he shares that the firm is seeing the highest levels of migration interest from clients in the Philippines, the expat community in Singapore, and Bangladesh, which allows dual-citizenship.
“President Duterte is making wealthy individuals in the Philippines quite nervous. We are also seeing some interest in Thailand, especially with the passing of their king,” he adds.
However, Volek points out that a common misconception of the investment migration industry is that their clients are physically moving. Many look at obtaining an alternative residence as a mean of gaining greater travel mobility and convenience.
“Having multiple passports allow greater travel freedom for clients from certain countries. For instance, if you are Singaporean or Malaysian, you have a very good passport from a travel perspective.
‘But if you’re a Philippines passport holder, you will not be able to travel to some countries on short notice, and obtaining visas can be a painful and time-consuming process, especially for wealthy entrepreneurs who need to get things done quickly,” says Volek.
Singapore is now tied with Germany as the country with the most powerful passport in the Global Passport Power Rank 2017, published by Arton Capital’s Passport Index. It has a visa-free score (VFS) of 159, while Malaysia, which ranked fourth, has a VFS of 156.
In comparison, the Philippines ranked 65th and can travel visa-free to just 61 destinations, while Bangladesh ranked 88th, with a VFS of 37. Thailand and Indonesia ranked 54th (VFS 72) and 67th (VFS 59) respectively.
Who are these mega-rich investors?
“Our clients are very varied but the one thing they have in common is, they are cash rich and time poor,” Volek tells Asia Finance.
“Age wise, they could range from younger tech entrepreneurs who made a lot of money on bitcoin and who see it trendy to have four or five passports, to more senior clients with various businesses and are concerned about passing down their wealth to the next generation,” he shares.
The most commonly quoted figure for membership in the high net worth individuals (HNWIs) club is US$1 million in liquid financial assets.
Meanwhile, ultra high net worth individuals (UHNWIs) are people with investable assets of at least US$30 million, excluding personal assets and property such as a primary residence, collectibles and consumer durables.
Besides Singapore’s GIP, other residence-by-investment programmes that Henley & Partners offer include: The Thailand Elite Residence Programme, Malaysia My Second Home (MM2H) Programme, UK Tier 1 Investment Visa (Residence and Citizenship for Non-EU Citizens), Portugal Golden Residence Permit, Malta Residence and Visa Programme, and Cyprus Residency by Investment.
The firm also offers citizen-by-investment programmes such as: the Antigua and Barbuda CBI Programme, the Grenada CBI Programme, the Cyprus CBI Programme, and the Malta Individual Investor Programme.