Residency by investment is a compromise between being a foreign tourist and a citizen. Indeed, residency by investment programs can provide many needed benefits without the added security of citizenship such as right to work, legal standing, right of abode and the ability to open a local bank account. Therefore, residency by investment serves important needs of aspiring expats and it is important to make the right choice.
Acquire Residency by Investment
There are many different residency by investment programs. To be sure, if you are a respectable global citizen you would have already achieved financial credibility. As a result, many countries appreciate someone who can come in and contribute immediately to their local economy.
This evaluation is based on firsthand experience. Additionally, I evaluated these residency by investment options based on the likelihood of qualification and sustainability of each program. My analysis only includes economic investment programs and their equivalent. Therefore, it is exclusive of sham marriages and things like that.
It goes without saying that qualification for a legit residency by investment program will require thorough analysis of your financial assets, identity, employment history, health examinations and criminal background checks.
The benefits and drawbacks of each residency program will effect each person differently. I explored many options before I made my final selection. Listed below are the residency options to which I gave the most consideration.
Hong Kong Residency By Investment
I lived in Hong Kong during 2014/2015 and therefore it was initially my first choice as a country where I could try and obtain residency. Unfortunately, in January 2015 the Hong Kong authorities completely discontinued their capital investment scheme for investors who wish to reside there. However, one practical alternative is called:
Hong Kong Visa for Entrepreneurs
This program starts out as a one year employment visa which is renewable annually. Additionally after 7 years of residing in Hong Kong you may be able to apply for permanent residency provided you have satisfied the terms of the program.
First of all you must develop your business plan for submission. This would include:
- Market analysis
- Profit projections
- Corporate structure
- Anticipated positive effects on the local economy
- Operation plan
- Administrative team
- Sufficient amount of paid in capital
Lets assume your business proposal gets approved and you get a 1 year residency visa. Unfortunately, this is where it gets a bit more complicated. This is because the requirements for the annual renewal will remain ambiguous. As a result, it will be up to the program directors to determine annually if you have maintained satisfactory contributions to the local economy.
Unfortunately, the Hong Kong residency by investment program does not provide benchmarks to shoot for such as number of jobs created or set amount of paid in capital.
Accommodative Environment for Westerners
Hong Kong is the financial gateway to mainland China and many investment opportunities exist there. Additionally, Hong Kong was a British colony for 100 years and this has created a more friendly environment for westerners. For example, English is widely spoken in the territory and also the legal system and financial markets are accessible to foreign residents. Furthermore, Hong Kong has long held a top spot on World Bank’s “Ease of doing business” index.
Beautiful Natural Environment
Hong Kong has a multitude of nature trails on the island and also on the surrounding islands. In addition, the territory has a multitude of Chinese cultural attractions which make Hong Kong much more than just a bustling city.
Local and International Transportation
Transportation on the metro is easily accessible and will meet most of your local needs. As a result, this includes a direct line to the international airport and also direct access to Shenzhen and rest of mainland China. Additionally, transportation options include extensive ferry service to the mainland and also neighboring islands including Macao.
Ambiguous Renew Criteria
The Hong Kong residency by investment program will require you to accomplish things such as “make a substantial contribution to the economy of Hong Kong”. This includes creating local employment opportunities and utilizing goods and services of the local businesses.
The problem is that, the criteria is subjective and they do not give applicants a threshold to shoot for. Therefore, it will be up to the Hong Kong immigration authorities whether you receive the annual visa renewal. As a result, this could get very tenuous over time especially if your objective is permanent residency.
Although I suspect most participants would get a fair shake things can surely change from year to year. Indeed, it would not be the first time the Hong Kong government had changed their minds.
Very Expensive with Limited Living Space
Furthermore, Hong Kong is a very expensive place to live and you will pay dearly for every sq foot of living space that you will enjoy. Things such as elevators are very cramped.
Being caught in tight spaces with sleazy Australians on several occasions made me second guess whether or not I would want to commit long term to Hong Kong. On that note, Hong Kong has a very large Australian expat population in excess of 100,000. That is way too many Australians. Additionally, air pollution from the mainland can get very bad at times.
Very Low Chance of Obtaining Citizenship
Another potential negative is that your chances of being granted a Hong Kong passport are nil. However, this is to be expected from a country that has only recently begun to relax their one child policy. Although many consider Hong Kong a self administered region, nonetheless it is part of China. As a result of their one child policy, the Chinese government cannot be handing out passports to foreigners. Obviously, this would be viewed as very unfair by their own citizens.
“Its not who you are its who you know”
American Platitude
In the US this is just a loser’s platitude, however in East Asia its reality. This is because Hong Kong is China and it is very Chinese there. This is good in many ways and it is what I love most about the city.
However, doing business in China is entirely another matter especially for someone who does not speak the language and has no Chinese family connections. Global Chinese businesses are not called the “bamboo network” for nothing. As a result, it will be very difficult to compete if you are an outsider. Even huge multi-nationals such as Wall-mart, Qualcomm, Google, Apple and Facebook have met fierce cultural resistance in China.
United Kingdom Residency by Investment
Another tempting residency option is the United Kingdom. Therefore, I spent 2 months in London evaluating their residency by investment program. Additionally, I traveled through Ireland for 6 weeks.
However, I actually have very little interest in living outside of Asia. Nonetheless, due considerations must be made. As a result, we need to have at least on European country on the list. This program is called:
“Tier One Entrepreneur Visa”
Financial requirements: Basically you need access to £200,000 that you have genuine control over or £50,000 if it comes from an approved funding source. However, the £50,000 option is ambiguous regarding the source of funds requirement. Therefore, to be safe you should just use the £200,000 as the minimum.
Additional requirements:
- Mastery of the English language
- Be at least 16 years old
- Be able to support yourself during your stay, beyond the initial investment
- The funds are to be invested in a business in the UK.
- Your investment must create employment for yourself and at least 2 UK nationals or qualified migrants.
- Previously, there was also a points based test that you needed to qualify under although it seems this requirement has been discontinued.
Pros of United Kingdom Residency
One nice program perk is the long residency duration before it comes up for renewal. The initial visa is granted for 3 years and 4 months and you can then apply to extend for 2 years. Additionally, after a 5 year period you are eligible to apply for what they call “indefinite leave to remain”. Thereafter, in due time you can apply for UK citizenship.
The language barrier is minimal here if you are from an English speaking country. Additionally, the UK is a not limited to only London and I presume that applicants have the option of England, Scotland and also Northern Ireland.
It goes without saying that London is a major intersection for just about everything including international transportation, culture, economics, finance, science and history. As a result, London is a truly multicultural city and you will find it all here (for an outrageous price).
Furthermore, the “tube” is easily accessible in London and getting around the city is fairly simple. Additionally, there is also easy train access to the mainland EU.
Plus, the recent depreciation of the currency will make it much easier to meet the financial requirement.
Cons of United Kingdom Residency
The weather in the UK may be a deterrent for some. It rains frequently and it can be persistently cold even during the summer months. Additionally, London is by far the most insanely expensive city I have ever been to and I have lived in Hong Kong.
Mauritius Residency by Investment
Mauritius is a little island republic located in the southern Indian Ocean off the coast of Madagascar. Although many people have never heard of it, I visited the island several times at the conclusion of some of my extensive travels in Africa. As a result, I seriously considered a couple of the Mauritius residency by investment programs. These opportunities for residency and citizenship are included in their constitution under the label:
“Mauritius Citizenship Act”
- If you are retired you can obtain “permanent residency” after residing on the island for a period of 3 years and by transferring $40,000 USD equivalent annually into a Mauritian bank. However, permanent residency isn’t actually permanent. It only lasts for 10 years and to get it renewed you have to continue to transfer $40,000 annually into Mauritius.
- The second investment scheme requires an investment of a minimum of $500,000 USD equivalent into a qualified asset. This can be a qualified local industry or a residential home in a government approved development project. After making the investment you acquire residency and can retain it provided you maintain the initial investment amount. Then after 2 years you can supposedly apply for Mauritius citizenship.
Pros of Mauritius Residency
Mauritius is the real deal tropical paradise. Therefore expect the tropical breezes, turquoise water, excellent fishing, water sports and beautiful beaches that come with it.
The island population is multi-cultural and the locals speak English, French, Mauritian Creole and various Indian dialects. It is possible to get by with English, although French seems to be more commonly spoken by the locals.
On that note, one famous former resident of the island was the notorious dodo bird. But seriously, in case you didn’t know, Mauritius was the only known habitat of the now extinct dodo bird.
Furthermore, Mauritius is the financial gateway to India and it is a common tax haven for offshore corporations. Additionally, Mauritius is considered to be part of East Africa and also enjoys market access to the African mainland.
Last but not least, if you love kite surfing – then look no further!
Cons of Mauritius Residency
Unfortunately, the reputation of Mauritius as a banking center has come under scrutiny in recent years with the discovery of a $690 million dollar Ponzi scheme. The scheme was revealed at Bramer Bank and is said to have effected 30,000 accounts. As a result, their license was revoked and the bank was taken over by the monetary authorities on the island.
Furthermore, in my opinion the island does not have much of an economy outside of tourism. Indeed, the government is optimistic about sectors such as agriculture and medical tourism. However, I felt that their significance may have been overestimated. Additionally, the government has been running large current account deficits that may have been under reported by the authorities.
Mauritius Real Estate – “Buyer Beware!”
The real estate prices in the government approved residential developments have lost a bone jarring 70% of their value since the program was introduced a few years ago. As a result, foreign investors who bought into the real estate program are feeling the pain.
Although lower prices can sometimes create great buying opportunities, this may not be the case here. Indeed, discouraged owners will not always maintain upkeep on the properties if they are going to walk away. Unfortunately, I experienced this firsthand.
Furthermore, disgruntled owners will also be more prone to engage in sharp business practices with renters. As a result, this can reflect negatively on the entire residential community and create additional asset price depreciation.
In addition, Mauritius has a relatively large Afrikaner and French ex-pat population. As a result of my extensive travel in Sub-Saharan Africa, I inevitably had encounters with property owners and did significant business with these people. Their business standards are questionable. Perhaps I should have seen it coming on a couple occasions, although that does not excuse their sleazy behavior.
High Threshold for Mauritius Citizenship
I have been told by Mauritius residents that being granted citizenship after only 2 years is simply not how it works. As a result, investors who want to acquire citizenship need to develop strong community ties beforehand and should expect to wait for 5-10 years before being given serious consideration. Additionally, keep in mind that Mauritius does not allow dual citizenship, so you would need to give up your other passport.
Singapore Residency by Investment
One of the upper scale options for both residency and citizenship is Singapore. Indeed, Singapore is a lovely city-state that sits on the end of the Malay Peninsula. Although Singapore has a very short history, they have carried out a meteoric rise to compete with Hong Kong as the financial gateway to East Asia. As a result, Singapore has developed an economic citizenship program especially for financial specialists and business executives. The title of the program is:
“Global Investor Program”
Option A: You must invest at least 2.5 million Singapore dollars in a new business or an existing business
Option B: Invest a minimum of 2.5 million Singapore Dollars in a GIP fund that invests only in Singapore companies.
Additional Option A Criteria:
- Proven 3 year entrepreneurial/business background
- Provide detailed 5 year plan
- 3 years audited financial statements
- Annual business turnover of 50 million Singapore dollars in the prior year!
- The company must be engaged in a GIP approved industry
- If the company is privately held you must hold 30% of the shares
- Company hires at least 5 additional employees
- Additional annual business expenditure of minimum 1 million Singapore dollars
The “permanent” residency must then be renewed at the end of 5 years and should be possible provided you have been true to the investment program. Additionally, after living in Singapore as a permanent resident for a minimum of “2-6 years” you are eligible to apply for citizenship.
***Tip – it goes without saying that option B is probably the most straight forward and efficient option for pure investors who do not directly operate their own established businesses.
Pros of Singapore Residency
For investors with adequate resources “Option B” is worth looking into. Indeed, Singapore is a major financial center that serves as a gateway to SE Asia and also China. Additionally, Singapore is a major manufacturing center and port city that sits on the Straits of Malacca, the busiest waterway in the world.
The city is squeaky clean and contains a multitude of business opportunities for the astute businessman. Additionally, Singapore is always listed at the top of every international ranking system for clean business practice and sound legal system.
Cons of Singapore Residency
Unfortunately, even with all its qualities Singapore is only a city. What I mean by that is since it is a small city state there really is no countryside or natural beaches to speak of. As a result, if you want to go hiking or hang out at a genuine beach then you are out of luck. However, if you want go shopping and hang out by the pool, then that’s a different story!
Historically, Singapore had a great leader named Lee Kwan Yew who controlled Singapore until he recently passed away. Unfortunately, good things can’t last forever. Although Singapore has retained many of its qualities so far, cracks are starting to show such as the loosening of monetary policy. Additionally, their debt to GDP ratio has shot well over 100% in recent years. These are definitely things to keep an eye on if you are considering Singapore as a citizenship option.
Furthermore, don’t forget that Singapore is also a very expensive city with limited living space and this could begin to weigh on you over time. Additionally, Singapore is directly in the path of the smoke from the cut and burn forestry tactics used by the plantation owners in Indonesia. As a result, at certain times of year air pollution can reach dangerous levels.
Last but not least, Singapore does not permit dual citizenship.
Malaysia Residency by Investment
Malaysia residency by investment offers the longest duration residency visa in the world. Additionally, the qualification criteria is also the most reasonable that is available anywhere. As a result, the visa is applicable in all sections of Peninsular Malaysia. However, Sabah and Sarawak, on the island of Borneo require a separate application process. The program is called:
“Malaysia My Second Home”
There are 2 tiers for qualification:
Financial Strength: <50 years old: Over 500,000 MYR equivalent >50 years old: Over 350,000 MYR equivalent
Monthly Income: All age groups must show > 10,000 MYR monthly income or equivalent
Fortunately, the income and financial guidelines can be met with many different sources of income including pension, investment, interest, royalties and income from work. However, all sources of income must come from offshore and the MM2H visa does not allow any form of employment in Malaysia.
Once approval is received from the government the applicant must maintain a minimum deposit amount in a Malaysian Bank of 300,000 MYR if <50 years old and 150,000 MYR if you are >50 years old.
Furthermore, the duration of the visa is for a full 10 years with no minimum residency requirements inside Malaysia. Additionally, at the end of the 10 year period the visa is renewable.
Pros of Malaysia Residency
Obviously, the liberal nature and long duration of the MM2H program makes it a very attractive option. Additionally, in Malaysia I consider some of the potential negatives to be positives. This is because Malaysia has certain characteristics that would make it unattractive for the less desirable applicants. For example:
- Malaysia is is an Islamic country with Islamic values.
- It is extremely hot and humid during certain times of year
- Traffic jams are epidemic.
I see these things as positive because it helps to filter out the carnival seekers. As a result, most of the expat crowd here seems to be able to integrate more seamlessly than in other places that I have visited such as Hong Kong, Thailand and Indonesia.
Malaysia is an Islamic Country
In Malaysia, foreigners are welcome to live in the country even if they are not Muslims. However, Malaysians expect visitors to act respectfully in regards to the social values that exist here.
Most recently in Malaysia, I was very impressed with the arrest of some Australians who attended the F1 races. It seems they amused themselves by committing a lewd act in front of the TV cameras after the race ended.
Unfortunately, I have been held a captive audience to this global pestilence far too many times. If the judge felt the Australians had known any better, I am sure they would have gotten a good caning and some jail time. However, under heavy diplomatic pressure the judge let them off with a warning in the end.
Indeed, the founding father of Singapore, Lee Kwan Yew so accurately described Australia as:
“The New White Trash of Asia”.
Lee Kwan Yew
Unfortunately, his premonition about the land down under has come to pass. Over the years, the Malaysian government and Lee Kwan Yew have certainly not seen eye to eye on some national issues. However, it is no small relief that the local authorities here will not tolerate visitors trying to turn Malaysia into a trailer park.
Unfortunately, the seedy nature of locations such as Bangkok, Phuket and Bali is very attractive to this sort of tourist. I wish the local governments in those otherwise very appealing locations would also begin to assimilate the more respectable social values of their neighbors.
Malaysia is Distinctly Multicultural
The population of Malaysia is majority Malay with large minorities of Chinese Malay, Tamil Indians and also indigenous ethnicities. Additionally, Malaysia is multilingual and English is widely spoken which makes the transition easier for expats from English speaking origin.
Malaysia Residency Financial Benefits
Relatively speaking, Malaysian Banks pay a very nice return on savings accounts. As of the time I am writing this it is easy to secure a 12 month term deposit in excess of 4% interest! Additionally, the Malaysian government has recently published their budget for 2018 and it is staying true to conservative economics which should bode well for long term economic prospects.
Oil and Gas Dependency
Malaysia is heavily dependent on oil and gas revenues to fund their government. The recent commodity price slide has caused their currency to depreciate below the long term trend. This creates temporary funding difficulties for the government however, this makes financial qualification much easier for the MM2H program. In time, the pressure on the commodity markets will subside and the Ringgit should return to normal valuations.
ASEAN & China
Malaysia is a member country of ASEAN and is set to benefit from the long term economic opportunities in the region. Additionally, Malaysia has opened up more economic ties with China. As a result, China has now become Malaysia’s largest trading partner and this bodes well for the economic prosperity of Malaysia.
Last but not least, Malaysia is internationally recognized as providing asset protection to foreign investors. As a result, Malaysia is consistently ranked in the top 20 world wide for “ease of doing” business.
Cons of Malaysian residency
None! Malaysia is a win – win situation from my perspective. The potential negatives are also positives and therefore they are canceled out.