Buying a property overseas: preferred destinations for Hong Kong investors
Expert Jennifer Lai advises on key consideration Hong Kong and mainland Chinese buyers need to take into account before making a real estate investment overseas
Jennifer Lai is managing partner at Henley & Partners Hong Kong. She talks about mobility, education and retirement plans – key considerations when buying property overseas.
Which countries are the top real estate investment destinations for Hong Kong and mainland Chinese buyers?
Britain, the United States, Canada and Australia remain the most popular real estate investment destinations for Hong Kong and mainland Chinese buyers. Apart from the property itself, their buying decisions are often associated with mobility and particularly with access to good education for their children. Japan, since late 2015, has become another popular destination for Hong Kong and mainland buyers. For example, Daikanyama, a prime location in Tokyo, has seen an increase in the number of foreign – including Chinese – investors.
I want to retire in another country with a lower cost of living in Asia while maintaining a good quality of life. What are the options?
Some Southeast Asian countries such as Malaysia and Thailand are gaining in popularity among retirees as destinations for a second home. The “Malaysia My Second Home” programme requires applicants to meet certain financial requirements – that is, show that they can support themselves financially without seeking employment – and, in exchange, they and their dependants are granted a 10-year, multiple-entry visa. This is effectively a residence permit, enabling the successful applicant and their family to live in Malaysia. And, of course, Thailand has long been popular with Hongkongers. The country’s residence programme for foreigners allows them to live in Thailand for up to 20 years.
I want to travel with fewer restrictions. Can I invest in a property overseas, say in an EU country, in exchange for a more ‘powerful’ passport?
According to Henley & Partners Visa Restrictions Index 2017, the Hong Kong SAR passport is ranked 22nd, meaning that holders of this passport can enjoy visa-free access to 152 destinations. If you would like to obtain a second passport with more visa-waiver agreements, getting one from an EU country may be an option. For example, Malta and Cyprus offer citizenship through an investment programme. Citizenship allows freedom of movement to all EU countries. Buying a property in certain EU countries – such as Portugal, Spain or Greece – entitles the investor to a residence visa that allows them to enter the Schengen area visa-free. Some programmes do not require physical residence in the country, while others require minimal visits of a few days per year. Such programmes are often marketed for their ability to provide visa-free access to other countries. Notable examples include the citizenship-by-investment programme in Caribbean countries.
Has the Brexit vote had any impact on demand for British properties from Hongkongers?
In my opinion, the impact has so far been minimal. The UK remains a civilised country with a good education system, and Hong Kong – and increasingly mainland – parents want to send their children there to study. After the Brexit referendum result was announced, the British pound fell against the US dollar due to worries about the UK’s economic prospects outside the EU. This, however, has presented attractive opportunities for long-term investors from abroad, especially those who are planning to send their children to a UK school in the future. The property can be rented out and, in later years, occupied rent-free by the owner’s children. The UK Tier 1 investor programme grants residence visas for an initial three-year period to foreign investors who purchase UK government bonds, and share capital in active UK registered companies.