High Net Worth Immigration: A Win-Win for All

For many, upon hearing the word ‘immigration,’ what comes to mind will be a phenomenon mired in great political controversy. In much of the Western world, debate as to its benefits – or lack of – to the receiving country endures. Crucially, these discussions are centred on general, low-skilled immigration. On the topic of high-skilled immigration on the other hand, attitudes converge. The United Kingdom is evidence of this.

The United Kingdom (UK) was first seen to open its borders a couple of years after the end of WW2. Post-war, the country’s economy had been weakened. As such, immigrants from all socio-economic backgrounds were welcome, in order to provide growth to the labour market and significantly diminished public sector. In 1948, the British Nationality Act was passed, enabling all Commonwealth citizens to work and reside in the UK free from immigration restrictions. The consequences of such wide-ranging freedom of movement were great. An example is the National Health Service, which was borne from the higher numbers of foreign, trained workers. In time, however, concern about unchecked migration grew. Thus, in 1962 and again four years later, greater restrictions were placed upon Commonwealth immigrants by the Commonwealth Immigrants Acts, which were reinforced by the 1971 Immigration Act.

Alongside this, in 1973 the UK finally achieved membership of the European Economic Community, which subsequently became the European Union (EU). As part of the EU, the UK embraced global mobility for all Europeans, including its own nationals. For the first 30 years, migration from Europe to the UK and vice versa was relatively low. After the vote by EU countries in 2004 to include Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia, this trend changed. Additional factors in boosting the growth in immigration were UK’s impressive education system and growing economy. The International Passenger Survey records that, from 2010-2016, an average of 495,000 non-UK citizens immigrated to the UK per year, the global financial crash of 2008 being a key driver in this period. This has led to where the UK is now: likely leaving the EU after 51.9 percent of voters in a national referendum voted to leave.

Low-skilled immigration continues to be a source of great public debate. High skilled immigration – or high net worth immigration –, however, is generally considered desirable by countries, governments, and businesses worldwide.

The typical high net worth individual (HNWI) is a person with assets outside of their main residence with a value of US$ 1 million or more. S/he is highly skilled, works in a trained role and possesses a comfortable family home. As such, they do not seek the low or medium-skilled jobs which so commonly present a source of much contention in the general immigration debate. They are also likely to have higher personal expenses than the average person, particularly in areas of business, leisure, medical and educational tourism, and retail, and contribute more to public resources through taxation. Having already built a good life for themselves and their families, they are unlikely to move to the places they visit. Whether for or against low-skilled immigration, people tend to agree: greater numbers of HNWIs bring high rewards for the recipient population. A case in point is the UK’s residency by investment scheme: the Tier 1 Investor Visa. Neither side of the Brexit argument raised the Visa when arguing for or against immigration, nor has it been historically criticised by those opposed to low-skilled immigration.

Alongside the UK, many other countries are eager to attract HNWI immigrants. In Europe, residence by investment schemes are popular, currently offered by six countries: Austria, Greece, Italy, Malta, Portugal, and Spain. The United States goes a step further and offers two schemes: the permanent residence EB-5 Investor Visa programme, and the temporary residence E-2 Non-Immigrant Visa programme. Citizenship by investment schemes are also increasingly popular. Since Moldova and Montenegro announced new programmes last year, the total number worldwide is 12: Austria, Cambodia, Cyprus, Jordan, Malta, Moldova, Montenegro, Turkey, Vanuatu, and, the pioneers of citizenship by investment, the five Caribbean nations: Antigua and Barbuda, the Commonwealth of Dominica, Grenada, St Lucia, and the Federation of St Kitts and Nevis.

Given that citizenship by investment has its birthplace in the Caribbean, it is unsurprising that the programmes operated by these countries stand out for their quality and expertise. The advantages offered to HNWIs, the benefits to local economies and communities, and the high level of security, commonly known as ‘due diligence,’ are three areas in which the Caribbean truly excels. St Kitts and Nevis, the longest-standing jurisdiction in the industry, is a key example. Since 1984 when it first launched its Citizenship by Investment Programme, the twin-island state has received international acclaim for its due diligence procedures and anti- money laundering and financial terrorism best practices. Dominica, the so-called ‘nature island’ of the Caribbean, has also gained international recognition for its due diligence. Dominica has over 20 years of experience in the business, and is putting its Citizenship by Investment Programme to good use in its pursuit of becoming the world’s first ever climate resilient nation.

In spite of the Caribbean’s long history of expertise and development of its citizenship programmes, a common misconception persists. Those not familiar with the industry are often lead to believe that, by helping persons travel to Europe without the obtainment of a country-specific-visa, the programmes constitute an economic or security risk to the receiving countries. This misconception stems from a conflation of HNWI immigration with general, low-skilled immigration, and overlooks the facts of the programmes themselves. Central to the factual reality of these programmes are the strict economic and security conditions which investors must fulfil. Expert industry analysis highlights that the requirements set by Caribbean nations are actually far more rigorous than those set by any European visa regime.

To obtain Caribbean citizenship, investors must provide a financial investment of a minimum of US$100,000, plus processing, professional, and due diligence fees. A person financially able to do so is, as stated above, unlikely to need employment in the UK or any other country. Investors must also undergo stringent, multi-jurisdictional due diligence checks. Detailed information and evidence of their occupation, education, personal and residential histories and their source(s) of wealth are required, as are clean criminal records. Investors must also provide biometric data, including fingerprints. They are then checked by multiple national, government, and international bodies trained in anti- fraud, financial terrorism, and money laundering practices, and are checked against international criminal registers and terrorism databases. Importantly, such deep and wide-ranging security systems are exclusive to the Caribbean programmes. The country-specific visa regimes in Europe and the UK rarely come close in such quality. Consequently, HNWIs entering Europe or the UK are not subject to those countries’ visa requirements but far greater economic and security checks before they even set foot in the country.

Further highlighting the marked difference in the due diligence conducted by the Caribbean programmes even further, see a recent review of the UK’s Tier 1 Investor Visa scheme. Between 2008 and 2015, the UK Government has been accused of not operating “sufficient security checks” by Global Witness, an NGO which exposes corruption. According to Global Witness, the “Home Office assumed that the banks were doing the checks on the individuals” while UK banks assumed that, “because this individual was applying for a visa via the Home Office, the checks would be done further down the line.” Lord Wallace backs these allegations, holding the Scheme as “just one of the many ways in which illegally acquired money has flowed into London.” Such allegations stand in stark contrast to the thorough and multi-layered Caribbean due diligence programmes outlined above.

Overall, it is clear that HNWI immigration stands separate to the global debate surrounding low-skilled immigration. HNWIs bring tangible economic benefits to the businesses, economies, and people of the countries they visit, without adding any threat to the general population of those countries. The result is a win-win for all.