← Business Daily
Business Daily
Trump card: what are golden visas?
00:17:28
We hear from the super-rich looking for a different kind of dividend
Loading summary
Transcript70 lines
- [00:00]
A
This BBC podcast is supported by ads outside the uk.
- [00:06]
B
Hey, Ryan, that was a fast trip. It was like you teleported.
- [00:09]
A
Yeah, just got in. I'll get all my expenses logged, I promise.
- [00:12]
B
Oh, no, you're okay. SAP Concur uses advanced AI so your expense report will practically write itself. Quite the breakthrough. It's like we've been teleported into the future. All right, so just curious, would you give us written permission to convert your matter into energy patterns and reassemble you at, say, random travel destinations?
- [00:28]
A
Margaret, are you building a teleporter?
- [00:30]
B
No. Yes.
- [00:32]
A
SAP Concur helps your business move forward faster.
- [00:34]
C
Learn more@concur.com Vanity Fair calls BritBox a delicious streamer. Collider says everyone should be watching. Catch Britain's next best series with Britbox. Stream acclaim new originals like Code of Silence.
- [00:47]
B
You read lips right?
- [00:48]
C
And Linley, based on the best selling mystery series Take it from here. And don't miss the new season of Karen Piri coming this October.
- [00:57]
D
You don't look like.
- [00:58]
A
Please.
- [00:59]
B
I'll take that as a compliment.
- [01:00]
C
See it differently when you stream the best of British TV with BritBox. Watch with a free trial today.
- [01:10]
A
Hello. Welcome to Business Daily with me, Josh Martin. Today we're looking into the global marketplace for visas. Obtaining the right to live and work in a new country can be the most consequential experience of your life, fraught with form filling legal fees and many years of uncertainty. But if you have enough money in your bank account, there's a booming industry set up to offer residency, even citizenship, quickly in return for your investment.
- [01:35]
E
The monetization of mobility and countries will make that easier for the wealthy, while those who don't have those sorts of opportunities are left to scramble and do what they can.
- [01:47]
A
We'll ask what motivates the super rich to collect residency visas or passports? Like somebody might collect sports cars for Hong Kong people.
- [01:56]
F
If we want to leave Hong Kong, we don't feel comfortable there anymore. So where should we go?
- [02:02]
A
And as the Trump White House looks to roll out the red carpet of residency for wealthy foreigners, we'll ask if he's scaring away exactly the type of people he's tried to entice.
- [02:11]
D
The vast majority of ultra high net worth individuals that are looking for second permanent residency or citizenship, they do it for tax reasons. But what we are finding is there is a small minority who are looking for a safe haven as opposed to a tax haven.
- [02:24]
A
Could this be a golden opportunity for economies large and small to grow? And what risks lie ahead as the number of nations offering these programs expands. That's all coming up on today's Business Daily. Migration to the United States has been symbolised by the green card for more than a century. But US President Donald Trump's latest announcement on visas took a more optimistic tone and a more eye catching colour.
- [02:50]
G
The gold card. Remember the words the gold card? Somebody said, can we call it the Trump Gold Card? I said, if it helps use the name Trump, I'll give it to you for free.
- [02:59]
A
While cracking down on undocumented migrants, the White House launched a plan to hand out residency visas to any foreign investors who passed background checks, so long as they paid up.
- [03:09]
G
We're going to be putting a price on that card of about $5 million and that's going to give you green card privileges. Plus it's going to be a route to citizenship. And wealthy people will be coming into our country by buying this card.
- [03:22]
A
Kate Hooper, senior analyst at the Migration Policy institute in Washington D.C. was watching closely. But a few months on after the Gold card website has launched is still waiting further details.
- [03:33]
H
What we do know is that investors would need to pay $5 million and this would be a one off payment going towards paying down the US deficit. So that's about five times more than the current US investor visa, which is called the EB5 program.
- [03:48]
A
So this would look to replicate and be a new version of that program, is that right?
- [03:54]
H
It's fairly distinct from the current US Investor visa. The current program gives you a green card, but it's conditional on the investment that you're making in a business. So the business has to create or preserve 10 jobs for US workers, whereas this would be a one off payment to the US government in exchange for a green card. So much more straightforward and not conditional. You know, we've heard the Commerce Secretary suggesting that this could be a program that really helps pay down the US deficit and suggesting that they might get hundreds of thousands of applicants. But that would be significantly more than the current US investor visa program, which gets applications in the tens of thousands and it's about a fifth of the price. So it seems a little unrealistic that this would be a major tool for paying down the deficit.
- [04:40]
A
Despite what the President told reporters in the Oval Office. Residency by investment and its relation, citizenship by investment, have existed for decades. They even share a similar nickname as Trump's gold card, commonly called Golden Visas and Golden passports, respectively. To get an overview of this multi billion dollar global industry, I spoke to Professor Kristin Surak, who wrote a book on the subject and is currently teaching at the London School of economics.
- [05:07]
E
Nearly 70 countries and overseas territories offer residence by investment program. And those run the whole gamut, from tiny microstates with populations of 100,000 people to big wealthy countries like the US like Portugal. So in terms of what countries are hoping to get out of them, it can really range. Some countries, especially for citizenship by investment, it's the country's main moneymaker. Up to 50% of the government budget might come from these programs, but, you know, for a country like the US it's not going to be a drop in the bucket.
- [05:41]
A
It's worth differentiating between golden visas, which give investors a residency card with golden passports, where investors effectively buy citizenship and can gain a second passport. The latter option has been controversial because in some countries such as Cyprus, Malta and Dominica, sometimes lacklustre vetting has meant bad actors and even criminals were granted passports. The former president of the Comoros, meanwhile, an island nation off the coast of Africa is in jail currently after being convicted of embezzling funds. Its golden passport scheme. So do golden visas offer nations any more protection from scandals?
- [06:19]
E
Getting a golden passport, that is a citizenship, is pretty different to getting a golden visa, which is just residence. So, you know, for example, citizenship is inheritable. Your kids can get it, whereas residence is not. It's just you who has it. You know, citizenship gives you a much bigger range of rights and possibilities. But in both cases, we've seen an expansion of programs across the world in the past 20 years.
- [06:45]
A
Countries selling golden passports have typically been small island nations with very few natural resources looking to cash in on the visa free travel status their passport bestows upon the owner for residency by investment. The range of countries offering these visas is much wider, as is the reasons for doing so. When Portugal launched its golden visa program in 2012, it hoped that foreign investors would revive its property market after a crash. The program caught the eye of Hong Kong citizen Lily Chan.
- [07:17]
F
We travel to Europe at least once a year for holidays and things. So I have been to Portugal before. It was peaceful, safe, good weather, good food, and it's cheap.
- [07:30]
A
So this was a financial decision in order to hopefully be granted a residency. Perhaps it might put you on a pathway to citizenship. What made you think that residency in another country was something that you wanted?
- [07:45]
F
Well, at the 2017, I was thinking about retirement and try to diversify my money.
- [07:52]
A
Why did you want Portugal? Was there a reason?
- [07:55]
F
Well, it's a EU passport, so I would be free to go to different countries. I don't have to live in Portugal there, and even I get a passport and I only need to spend seven days out of a year there. So that worked perfectly. And also the Portugal is. The property is cheap, it's half a million euro. But the package I get into is they have some very old building, and the government encouraged people to re renovate this building. So my package is only 350,000 instead of half a million.
- [08:29]
A
And although Golden Passports might grab the headlines due to alleged criminals exploiting them, Golden Visas can offer an insurance policy for citizens living in politically dicey circumstances. No wonder then that historically they've been purchased mainly by citizens of mainland China and the Middle East. Hong Kong's political situation also influenced Lilly.
- [08:49]
F
It's some sort of insurance for good reason for, you know, for Hong Kong people. If we want to leave Hong Kong, we don't feel comfortable there anymore, so where should we go? We cannot actually just walk into China and live there.
- [09:04]
A
The golden visa program that Lilly used for Portugal, which was based on residential property investment, helped channel 7.5 billion euros, or $8.7 billion, into the Portuguese economy. But it no longer exists, in part because of the overheating housing market in, in places like Lisbon, where Lily bought and renovated her apartment.
- [09:26]
F
Well, I don't think I am responsible for this. The government should know better and thought it through before they put this on the market. For us, it's an investment. You cannot say that. You know, we jack up the market because we bought into this. Of course, you, you want profit, but we took risk also, it's not a free lunch.
- [09:50]
A
But the industry's controversies extend beyond pricing out locals from housing. The European Court of Justice in April ruled against Malta offering citizenship by investment, arguing that the small island nation effectively sold EU citizenship. By then, though, more than 130,000 people had obtained EU passports or residency rights through these schemes, giving them freedom of movement across the entire bloc, a precious commodity for the super rich. Professor Kristin Surak.
- [10:20]
E
Again, within the European Union, these programs became very politicized. It was framed as very problematic. The momentum just kept on building to say that, you know, we're not going to let the wealthy jump to the head of the queue. We're not going to get allow criminals to pay their way in. So there's been a lot of movement from the European Union side to put pressure on countries about these programs, and it's been fairly successful in recent years. So the European Court of Justice recently ruled against Malta's citizenship by investment program. So those are no longer possible in the European Union. Portugal ended its real estate investment option, but it hasn't gotten rid of its full program. Spain recently ended its program, and some countries in the accession process have also ended their programs. Interestingly, it's moving in the opposite direction of the rest of the world. Argentina passed a legal provision to facilitate citizenship by investment, and it will probably launch a fully operational program next year. And Sao Tome did the same. So it's interesting to see how the global scene is being reconfigured.
- [11:24]
A
You're listening to Business Daily with me, Josh Martin. Today we're joining the multi billion dollar race to lure the super rich with golden visas. The list of places that'll grant you a golden visa is actually growing even as the EU pulls up the drawbridge on a back route into the bloc. The but one country at the bottom of the world is drawing the type of wealthy people President Trump would like to invest in, the United States. And they're not from China or the Middle east, they're from the US Itself.
- [11:54]
I
Well, I had been traveling to New Zealand for quite an extensive time, more than 30 years, and I made the decision to move my business there and also to move there full time. So it was natural for me to enter the country as part of a program to bring investment into New Zealand.
- [12:13]
A
That's Mark Bergman, a US Tech investor and venture capitalist who moved from Silicon Valley to New Zealand under a previous iteration of the small country's golden visa program.
- [12:23]
I
The visa itself is sort of ephemeral. It's an electronic file attached to my passport. When I come through the country, they scan my passport, which is still a US Passport, and they immediately see that I have resident status. And you talk about the cost. I view it because of the way I entered the country, more as opportunity. I'm investing in New Zealand and I'm expecting to see significant economic return. It's sort of up to me. If I do a bad job, obviously I won't see those returns. But my hope is that I will make significant return and create great value within New Zealand.
- [12:56]
A
So you see it as part of a transaction. Is there a risk when we view residency and citizenship as a product that can just be bought and sold?
- [13:08]
I
I think so, given my long connection to New Zealand. I have a lot of attachment to the country and I want to see the country flourish. And people coming into the country as migrants who want to contribute and add to value, tremendous improvement. Those that are buying a visa for protection or for backup don't add as much value. And I think they can take away a little bit from the Value of migration.
- [13:33]
A
Do you understand why? Examples such as yourself, people that have effectively bought residency. Do you understand why the topic is controversial for some?
- [13:43]
I
Oh, absolutely. In fact, describe it the way you just did and say, I bought residency. I would deny that. I'd say, no, I made a commitment to the country.
- [13:51]
A
Do you sense the irony, though, of Trump trying to attract wealthy foreigners just as wealthy Americans are looking for an exit?
- [13:58]
I
Oh, there's plenty of irony in his economic plans, and I think this is one example. But as it's been described by President Trump, I don't view it as an investor visa, I view it as buying a visa. The difference being that when I invest in New Zealand, all the assets I invest continue to be my assets. In the case of the golden visa as described, the $5 million goes directly into the US treasury and you never see it again. That's buying, not investing.
- [14:26]
A
Mark's level of commitment is somewhat of an anomaly of these programs. For the poor island nations of the Caribbean and Pacific who first started selling passports, it was a near perfect product. Selling official documents boosted government revenues, while the super rich would rarely relocate or put pressure on public services. New Zealand's investor visa was designed to be the opposite of that.
- [14:49]
D
We actually had a regime in place, but a lot of that money was actually going into bank accounts. And as soon as permanent residency had been granted, the money was then sent back to the home country.
- [14:59]
A
That's Stuart Nash. He's a former government minister in New Zealand and he helped redesign the country's policy on residency by investment. He now works as an immigration consultant trying to get the uber wealthy to relocate to the South Pacific nation.
- [15:13]
D
We ensured that people who were investing into the New Zealand economy had to be investing in active investments, private capital, venture capital, and had integrity. People had to prove that the money they were investing came from a legitimate source. So we wanted to avoid anyone who had made their money out of criminal activities were intelligible.
- [15:33]
A
Why does a New Zealand offer stand out?
- [15:35]
D
Well, I'm not too sure if the visa itself is a competitive advantage, but certainly the country of New Zealand is. You know, you've got geopolitical tensions all around the world. You've got divisive politics in the United States, you've got saber rattling in the South China Sea, you've got the tinderbox, which is the Middle east, and you've got New Zealand at the bottom of the world. Now, you know, our police don't carry guns. There's never been a school shooting. We are known as a little bit of a paradise. I will be honest with you. The vast majority of ultra high net worth individuals that are looking for second passports or second permanent residency or citizenship, they do it for tax reasons. That I suspect will always be the case. But what we are finding is there is a small minority who are looking for a safe haven as opposed to a tax haven.
- [16:15]
A
Is it simply a transactional relationship where, as you alluded to, the applicants get preferential tax treatment compared to their host country, preferential entry and exit requirements. If travelling to third countries and the host country gets a boost of investment, gets capital that it may otherwise not.
- [16:35]
D
Get at the base, it's transactional. The vast majority of people I've met actually are as passionate about New Zealand, if not more so than a whole lot of Kiwis. But you do find that they come over here, they love the country, they spend a lot of money, they interact, some of them, not all of them will become involved directly in commerce. At the base level, you know, they're providing their wealth and for their wealth they are getting permanent residency.
- [16:58]
A
They're getting permanent residency almost as a souvenir for a slightly longer than usual holiday. Right. If most of them don't relocate and don't plan to, that's true, but we.
- [17:10]
D
Do get the use of their money in a way that we wouldn't have access to capital.
- [17:13]
A
Without them, the vast majority of the world's population would will live, work and die in the same country they were born into. Golden visas offer a way around this for the wealthy few. But countries joining the multi billion dollar marketplace offering residency and then passports to the highest bidder may find that investors are not necessarily loyal shoppers. I'll leave the last words to my two guests who have gone through the residency by investment process. Each have different levels of commitment to their new sometimes home.
- [17:44]
I
Well, I can only speak to my own experience. I've been, as I said, I've been coming to New Zealand and I've been running a business in New Zealand for many years. Having moved full time and obtained a permanent residency, it's, it's a clear shift. Whereas before there was always this sense of, well, maybe you're just a tourist, now they see that I am a Kiwi along with them.
- [18:04]
F
It took time to grow into, to grow into that. You know, I don't want to be too attached to it because it's a lot of uncertainty going on. You know, it's a business deal. So far it's a backup plan, but it could be maybe a real plan.
- [18:19]
A
So it's about keeping your options open.
- [18:21]
F
Exactly.
- [18:22]
A
And that's it for today's Business Daily, produced and presented by me, Josh Martin. To hear more, just search Business Daily, wherever you get your BBC podcasts. Thanks for listening.