In the last few years, Chinese immigration has become an interesting topic, primarily due to a keen interest being shown by Chinese investors who have sought to obtain permanent residency or citizenship through the schemes offered by the Government. PKF has invested resources in past years to help promote such immigration.
Malta has been wooing the Dragon for a number of years, and some may recall that last year marked the 45th anniversary of the establishment of diplomatic ties between Malta and China. Evidently, the ongoing relations between the two nations have been accelerated in the past three years since the signing of the Memorandum of Understanding (MOU) on a five-year Medium-Term Cooperation Plan in 2014, by virtue of which the two countries agreed to encourage and facilitate investment activity in specified areas of cooperation namely energy, infrastructure, civil aviation, financial services, research and innovation, cultural cooperation, education, health, sport and people-to-people exchanges. Indeed, we have witnessed this enhanced cooperation flourish principally in the rescue of Enemalta in the energy sector and eagerly look forward to start reaping the fruits of this joining of forces in the other areas of focus outlined in the MOU.
In tandem, back in China, the devaluation of the yuan, the slowing down of China’s economic development, and inflation in Chinese house prices have become key concerns for the large majority of Chinese high net worth individuals (HNWIs) and such anxieties have been translated into push factors for China’s wealthy who are increasingly turning their attention to seek shelter in overseas financial safe havens.
The ‘Immigration and the Chinese HNWI 2017’ report, released by Hurun Report in association with Visas Consulting Group, pegs the United States as the most popular immigration destination (namely the EB-5 Programme) for China’s HNWIs for the third consecutive year. Closely overtaking the United Kingdom, Canada has become the second most popular country and Australia stands at fourth place. Interestingly, according to the Chinese Immigration Index, the top ten list has ushered in three new entries in 2017 – Malta, Antigua and Dominica – with our tiny Mediterranean island racing to the fifth place, while its two new island companions sit modestly at ninth and tenth place respectively.
Education tops the list of reasons for which Chinese HNWIs take the leap to immigrate overseas, followed by living environment, at 64 per cent, for the fourth year in a row. Medical care is also among the pull factors for overseas immigration. The hindrances faced by those looking to move outside China include long waiting times, language barriers and difficulty of integration into mainstream society.
Despite the law prohibiting Chinese citizens to transfer more than $50,000 annually outside the country, rich Chinese people have been exploiting alternative loopholes to move their money. News that an estimated $1 trillion (circa €838 billion) was moved out of China in 2015 sheds light on China’s wealthiest people’s reliance on offshore investments, the use of Hong Kong as a gateway, currency traders and others even going to the extent of investing into sophisticated insurance vehicles.
Amid this backdrop, it is not surprising that last year China reacted and mapped out targets to protect its economic and social development, the tone of which indicates that the Chinese Government is deeming the issue of visas to accredited foreign experts as a key to stem the outflow of talent. To this end, at the dawn of the new year – precisely on 4th January 2018 – the State Administration of Foreign Experts Affairs, the Ministry of Foreign Affairs and the Ministry of Public Security jointly published a regulation introducing long-term multi-entry visas designed to attract individuals falling within specific talent groups of which the country is experiencing a scarcity. The regulation forms part of the State Council’s strategy geared towards the promotion of foreign investment growth.
The novel visa scheme, however, is proposed exclusively to talented foreign personnel desiring to move to and work in the Asian territory. China is seeking to lure high-end foreign talent, such as scientists; Nobel Prize Winners (awarded in Physics, Chemistry, Physiology, Medicine or Economics); top-notch directors of world famous colleges of music, fine arts and arts; chief conductors and vocal performers of the world’s leading orchestra; winners of famous literature, film, drama and music awards; and high-ranking Olympic Games athletes. The list of conditions and sectors goes on, ensuring that the crème de la crème of foreign talent is drawn towards China in a smart strategy to give the country’s economic and social development its desired boost.
Aiming towards quenching the country’s thirst for such human resources, at least 50,000 foreigners are envisaged to benefit from these so-called ‘talent visas’ which shall have a validity period of five to ten years. Such visa holders, including their spouses and minor children who are granted similar conditions, will be entitled to remain in China for up to 180 days at a time and the Chinese Government is promising a smooth and simplified application process, which may be completed online and at zero administrative costs.
The Chinese ‘talent visa’ scheme reminds us of our own Government’s pledge in 2014 through concessionaires to attract foreign investment and talent to the island which has been emphasised to be the underlying spirit of the Individual Investor Programme (IIP). Further pushing on this front, by means of amendments to the Malta Citizenship Act introduced last summer by virtue of Act No. XXIV of 2017, the Government has extended the possibility of naturalisation as a citizen of Malta to foreigners whose naturalisation is of exceptional interest to the Republic of Malta, whereby ‘exceptional’ is understood to mean “unusually excellent or manifestly superior at a local level” in relation, primarily to “contributions by scientists, researchers, athletes, sports people, artists and cultural performers”.
By accident or design, therefore, we seem to be synchronised with the Dragon’s own philosophy in a concerted drive to attract talent. Both countries strive hard to build their own home-grown version of a golden Silicon Valley industry.