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https://scmp.com/magazines/style/news-trends/article/3026833/protests-intensify-where-are-rich-hongkongers-investing News & Trends
As protests intensify, where are rich Hongkongers investing in property to get a foreign passport?
At least 20 nations that offer citizenship or residency through property investment are growing increasingly popular among city’s residents looking for a ‘Plan B’
The luxury residential development of Casa Burés, in Barcelona, Spain, which is one of the countries attracting citizenship inquiries from Hongkongers and mainland Chinese residents. Photo: Lucasfox.com
The recent unrest in Hong Kong has sparked a considerable rise in inquiries from residents contemplating a move abroad – but the residency rules of the countries they are sizing up vary hugely.
The degree to which Hong Kong residents may or may not be considering leaving the Hong Kong Special Administrative Region is being widely discussed and debated. For those contemplating a life overseas – or even hedging their bets for the future – calling another nation home can be a simple matter of property investment.
At least 20 jurisdictions now offer citizenship or residency by investment, but requirements vary, as do the levels of investment spend.
John Hu, founder and principal consultant of John Hu Migration Consulting, says it is not simply a matter of buying a property and then getting a passport.
Luxury villas at Limassol Marina, in the city of Limassol, Cyprus – a nation that has no language test for citizenship applicants.
Most countries – apart from Cyprus and Bulgaria – have a language test for citizenship applicants, Hu says. Some specify a waiting time before applying, or require foreign owners who are seeking citizenship to live in their home for a certain time.
“For example, with [the Republic of] Ireland you only have to stay there at least one day a year to retain your residence status,” Hu says.
“The United Kingdom requires residency for 50 per cent of the first five years before you may apply for settlement, while in the United States, you have to live there for a total of five years before citizenship application, and should not leave the country for more than six months to retain your residence status.”
Applicants are not normally looking for a Spanish passport, but want the comfort of possibly living in an European Union country, having the ability to travel visa-free within Europe and to educate their children in Europe
Nevertheless, homes in these so-called golden visa countries are becoming increasingly popular among Hongkongers looking for a “Plan B”, Hu says
“They can invest now, enjoy the rental returns and have the option of moving there at some time in the future,” he says.
Hu says the number of Hongkongers making inquiries has been rising recently, with Ireland and Portugal’s programmes the most popular.
Villas in the hills above the city of Paphos in Greece, which offers one of the cheapest citizenship programmes, with a minimum property investment of about US$275,000.
Greece’s programme is one of the cheapest, requiring a minimum property investment of €250,000 (US$275,000) with no obligation to live there to retain residence status.
Citizenship, on the other hand, requires seven years of residence and there is also a language test, which can prove difficult for some.
The language barrier is easier in Portugal, where citizenship by property investment has two entry levels. The first applies to old units which require renovation work to make up the €350,000 (US$386,000) total investment. The second level requires a spend of at least €500,000 (US$551,000) in any property.
Spain’s golden visa scheme was launched in 2013 and requires a minimum property investment of €500,000.
Barcelona-based Alexander Vaughan, founding partner of the property agency, Lucas Fox, has been receiving more Hong Kong and mainland Chinese inquiries since the start of this year.
Yet these applicants “still represent a relatively small percentage of our overall sales in Spain”, he says.
The historic Casa Burés development in Barcelona, which is among of the luxury Spanish developments attracting inquiries from Chinese golden visa applicants. Photo: Lucasfox.com
“Some of the high-end branded new development projects we are selling, for example, the Mandarin Oriental Residences in Barcelona, are generating a good proportion of inquiries from [Chinese] applicants,” he says.
Vaughan says the Spanish golden visa programme is a motivating factor for many of his firm’s non-European applicants. “These applicants are not normally looking for a Spanish passport, but want the comfort of possibly living in a European Union country, having the ability to travel visa-free within Europe and to educate their children in Europe.”
After one year, the initial golden visa that comes with a property purchase is converted into a residency permit, which eventually – after five years – can become a permanent residency permit.
“The application and renewal process are straightforward and can be handled by your lawyer,” Vaughan says. “Once you have the visa you can live in Spain full time, there is no minimum stay requirement.”
The golden visa applies to the applicant and his or her spouse, children under 18 and other immediate family members who are dependent on the applicant, he says. The applicant and relatives can work in Spain.
The city of Istanbul in Turkey – a country that has lowered its citizenship criteria, so that it is available to people buying a home costing as little as US$250,000.
Turkey recently lowered its criteria, offering the opportunity for citizenship with a home costing as little as US$250,000 (down from US$1 million). This is helping to prop up the nation’s real estate sector, for while domestic home sales are falling, acquisitions by foreigners surged by 77 per cent in this year’s January to May period, according to the Turkish Statistical Institute (TurkStat).
Istanbul is the most popular city among foreign buyers, with demand doubling year-on-year, followed by the resort of Antalya.
Julian Walker, of Spot Blue International Property, says he is “starting to see a pattern” of mainland Chinese demand for golden visa properties in Turkey, although not so much from Hong Kong.
Turkey, which lowered its citizenship criteria – for a home costing as little as US$250,000 (down from US$1 million) – has seen acquisitions by foreigners surge by 77 per cent in this year’s January-May period
Yet that could change, given the comparatively affordable entry point and other lifestyle factors.
Walker says Turkey’s quality of life is good, while “the cost of living in Turkey is infinitely cheaper” than in Spain, Portugal and the UK. “You could live quite comfortably there for around US$600 a month,” he says.
According to local real estate agency Antalya Homes, a Turkish passport and citizenship can be processed and delivered within an average of 30 working days, with no minimum residency period required.
It is harder for foreigners to get residency or citizenship in the UK, where the minimum investment is £2 million (US$2.4 million) made into either share capital or loan capital in active trading UK companies.
Yet this does not seem to be dissuading high-net-worth-individuals from Hong Kong and mainland China, who, according to international property website Juwai.com, are snapping up UK golden visas at an unheard-of pace.
Avenida da Liberdade in Lisbon, the capital of Portugal, which has one of the most popular citizenship programmes among Hongkongers. Photo: Tamea International.
“Something is driving Hongkongers to obtain their golden visas now,” Georg Chmiel, executive chairman, Juwai.com.
“The 10 per cent share of Hong Kong Chinese who applied for UK golden visas in the second quarter is double their share in the first quarter and this is expected to rise further in [the third quarter].”
Mainland Chinese investors, meanwhile, account for 45 per cent of applicants.
The visa statistics show that mainland and Hong Kong Chinese have not let Brexit – the UK’s planned withdrawal from the EU after a 2016 referendum which saw 51.9 per cent of voters backing the move – negatively affect their view of the UK, Chmiel says.
[Despite Brexit, Hong Kong Chinese] still consider the UK an appealing place to live, invest and educate their children. The UK, with its excellent educational institutions, offers Chinese families the opportunity to feel they are giving their children the best possible start in life
“They still consider it an appealing place to live, invest and educate their children,” he says.
“The UK, with its excellent educational institutions, offers Chinese families the opportunity to feel they are giving their children the best possible start in life.”
In the first half of the year, the number of main applicant golden visas issued hit 69 per cent of the number for the entire year of 2018, he says
“The first and second quarters of this year rank as the second highest and fourth highest quarters [respectively] on record for total golden visa-related investment.
“At least £510 million [US$630 million] was invested in the UK in those two quarters alone by golden visa applicants.”
The data suggests Chinese buyer transactions will be higher in 2019 despite the political uncertainty in the UK.
Chmiel says: “In the long term, the economic impact will be much greater and will spread far beyond just real estate.”
BUYING GUIDE
What you can buy for US$273,415
Sea and city view new-build flats in the district of Kadikoy, gateway to the Asian side of Istanbul, Turkey.
The property is a gated community comprising 280 units in a 28-storey tower, offering a choice of one-, two- and three-bedroom flats as well as two-bedroom duplex flats that range in size from 66 square metres up to 191 square metres. www.spotblue.com
What you can buy from €795,000
Beautiful, new designer flats in Diputacio Bailen, a boutique building next to Plaça de Sant Joan in Barcelona, Spain.
Buyers can choose from two-and three-bedroom flats or a penthouse. In addition, residents enjoy the use of a communal terrace with kitchen and lounge areas with views across the city. www.lucasfox.com