George is having a great time as he sips his pint of Guinness in Dublin’s best pub, enjoying the world famous warmth of Make yourself at home (100,000 welcome). As one of the growing number of Chinese nationals investing in Ireland to make a change of residence, he has good reason to stay home.
George, who asked not to be identified, has invested €1mn in Ireland and said economic uncertainty in China has encouraged wealthy people like him to look for other ways to live abroad. He said: “I am worried about the future of China.”
Ireland’s ten-year immigrant investor program (IIP) is set to increase in 2022, with the number of prospective investors from China more than tripling to 785 in the nine months to September, up from 243 in 2021 to 812, almost twice the annual record set in 2019.
Since the launch of the scheme in 2012, Chinese investors, including those from Hong Kong, have accounted for more than 90 per cent of successful transactions and €1.18bn have been invested.
At the international congresses of the Communist Party of China, “the key word was ‘economic development’. But the key words of the 20th Congress [in October] he was “struggling.” said the director of a fund from Ireland, which focuses on the hospitality industry, in which George has invested 1 million. The official asked not to be identified.
“The middle and upper classes are worried about what this means for them, for their wealth, their work and their families,” he added.
Ireland has been an attractive choice in part because of the difficulties and similar processes elsewhere. Brexit made the UK a narrower option even before London in February suspended its migrant loan program over security concerns, and the US plan was also put on hold for months.
“We have seen a big jump [in IIP investments in Ireland] since 2017, “said Niamh Walsh, who runs TDL Horizons, which focuses on the hotel and tourism industry, in County Donegal, and has worked with IIP clients. “My heart is that this is because of Brexit.”
Other factors such as education and the country’s good reputation made the English-speaking EU member state an attractive choice for investors like George.
The nearly three-year-old coronavirus curbs — only fixed in December — were part of the reason China’s wealthiest people want to live abroad. “You can connect there,” said James Hartshorn, CEO and co-founder of Bartra Wealth Advisors, a leading IIP fund, whose portfolio includes social housing and nursing homes.
Many countries have schemes to provide residents or passports to sell money, but Ireland’s success has made IIP money “a tool to help finance areas that really need it”, Hartshorn said.
“Because of the high cost of interest, the interest rate goes up and the cost of goods goes up[which could slow investment in those sectors]. . . “The program is more important now than it was,” he said.
Employers have four options: they can invest €1mn in an Irish business, invest €1mn in an approved fund or invest €2mn in a stock exchange trust – all for a minimum of three years. Or they can give € 500,000 – or € 400,000 if the programs are made together with five people – to a project of art, sport, culture or education.
Peter Fitzpatrick, a member of the Irish Dáil from County Louth and a former Gaelic football player, has raised nearly €15m from Chinese investor IIP to build his county’s first Gaelic stadium in 60 years. .
“We have an agent who contacts people in Asia and they found 37 people who want to invest €400,000,” he said. “Maybe we could get the money [without IIP] but not quickly. It’s really a dream.”
George, who has been managing his environmental management business in China remotely, and Helen, a lawyer who also asked not to use her real name and invested €500,000 in the same fund, say education is a big motivation. George has a son at high school and Helen has one at university in Ireland.
Walsh said the “big advantage” is that investors only spend one day a year in Ireland. They do not lose the opportunity to live in their countries. However, the IIP program does not provide investors with a passport.
Investors need to maintain a minimum of three years. After that they can sell their money and keep the accommodation, but they have no additional responsibility, said the head of the tourism fund.
While Chinese demand is driving the IIP, US imports have increased. “It’s taken everyone by surprise,” Hartshorn said. “The main reason I’ve heard has to do with politics in the US. [Former president Donald] Trump has confused many people, there is polarization and concern about where things are going. There is a strong historical connection between Ireland and the US so it allows Americans to get back to their traditions,” he said.
The number of US applicants, usually around five or fewer since the IIP was launched, has more than doubled to 11 so far this past year. The program has seen 31 successful applicants from the US since 2012 and 1,511 from China, with significant contributions from Vietnam, Saudi Arabia and South Africa.
Chinese investors, coming from a world without Google, no Facebook and news from many countries, “really appreciate the freedom” that Ireland offers, said the head of a hospitality fund. But whether it can continue to attract the same number of wealthy subscribers depends on “where China goes from here” economically and politically.
He added: “Ireland was “Europe’s hidden secret . . . now it has been found.”