Una Mullally: Chinese millionaires taking advantage of golden Irish visas

Back in January, the European Commission published something of a finger-wagging, if not alarm-bell-ringing report on investor citizenship and residence schemes, which is basically the practice of selling passports, visas, citizenship and/or residency. It’s the kind of stuff you hear happening in far-flung sunny island nations, all white sand, opaque job titles and freewheeling tax regimes. But it happens in Europe, too.

The European Commission was concerned enough about this ongoing trend to research and write their report, naming 20 member states, including Ireland, regarding investor residence schemes, colloquially known as “golden visas”.

Ireland has golden visas, we just don’t really talk about them. Our scheme is called the immigrant investor programme. In order to avail of it, you have to have personal wealth of at least €2 million, and invest €1 million in Ireland for a minimum of three years. Application numbers are rocketing. This scheme, introduced in 2012, gives successful applicants a five-year visa, and after that, an indefinite right to a residency visa. All the millionaire needs to do is spend one day a year in Ireland. More than 90 per cent of applicants are Chinese citizens.

The risks posed by investor citizenship and residence schemes that the European Commission report identified included security. It points out: “Member states currently do not consult each other on applicants for investor citizenship. In comparison, prior consultation on security grounds between member states exists for applicants for short-stay visas from certain third countries. This is despite the fact that citizenship entails wide-ranging rights, including residence and the right to vote and stand in EU and local elections, awarded for life rather than a mere short-term visiting right. Another problem relates to the fact that a lack of co-ordination and commonly agreed criteria leaves room for ‘shopping around’ for the most lenient conditions.”

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Money laundering

A second issue is money laundering. In the case of Ireland, the funds are double-checked, “first through evidence submitted by the country of origin of the fund, and then by the competent services in the member state”. Then there is the risk of circumvention of EU rules. The commission received a complaint about someone who obtained citizenship through one of these schemes and then applied for an airline operating licence. Another risk identified is tax evasion – “the documentation issued under some of these schemes may make it very difficult for financial institutions to identify correctly the legitimate places of tax residence”. And so on.

It’s important to differentiate between citizenship and residence schemes. Citizenship is a bigger deal, and confers more rights. Ireland’s scheme is about visas and residency. An evaluation committee made up of senior managers in government departments and State agencies involved in enterprise and development meets a least four times a year to assess applications for the golden visas, and “provides considerations and recommendations to the Minister for Justice and Equality on the approval or rejection of applicants”.

A particularly interesting paragraph in the commission’s report details a characteristic of these schemes, which is in the input from businesses “which advise the governments on operating the scheme or carry out proactive tasks involving the exercise of the powers of a public authority in managing such schemes, yet at the same time also advise individuals on their applications to the scheme”. The report says that in none of the member states studied, whether for citizenship or residence schemes, “is there a mechanism to deal with the risk of conflict of interest that could arise from this situation”.

In 2018, Fianna Fáil TD Barry Cowen asked Minister for Justice Charlie Flanagan about the number and value of golden visa applicants for social housing investment and nursing home investment in 2017, whether he planned to review the scheme’s thresholds, and the number and value of golden visas issued every year since 2012 under which investment options.

Rising numbers

Let’s look at the rising numbers of applicants. In 2015, 67 applications were received. In 2016, 317 applications were received, an almost 500 per cent increase. In 2017, 334 applications were received. In 2012, the value of the scheme was €4 million. In 2013, it rose to €12.75 million. In 2014, €16.25 million. In 2015, €36 million. In 2016, €183.5 million. In 2017, €308.2 million. The biggest leap in investment is in the “enterprise category”. And when I mean leap, I mean that it went from €3 million in 2012 to €261 million five years later. In 2017, €45 million worth of applications were received for social housing projects, and €95 million for nursing home projects.

Isn’t it funny that when there could have been an argument that we needed the scheme to generate cash and investment, it barely registered, yet now, when we’ve turned a corner (apparently) and everyone is on the pig’s back (don’t mention the colossal housing or health crisis) the scheme has taken off?

If only those people in stifling shipping containers or banging on the walls of trucks as ferries dock on Irish shores had the gumption to be millionaires. Wouldn’t it make things so much easier? They’re not millionaires, though, they’re “migrants”.