Latest / IMI Podcasts / #12: EU Campaign Against CBI "Driven by Ideology": Philippe May on the Mobility Standard Podcast

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#12: EU Campaign Against CBI "Driven by Ideology": Philippe May on the Mobility Standard Podcast · IMI Podcasts

0:03
SPEAKER_02: Ladies and gentlemen, it's 7 p.m.
0:05
SPEAKER_02: in Dubai, 3 p.m.
0:06
SPEAKER_02: in Lisbon, 11am in St.
0:08
SPEAKER_02: Kitts.
0:09
SPEAKER_02: Welcome to a new episode of the Mobility Standard, the podcast where we decide current events, trends, and crucial questions related to investment migration.
0:19
SPEAKER_02: I'm your host, Christian Nessem, editor of Investment Migration Insider, and with me in today's episode I have my co-host Rogelio Castres, as well as our guest this week, Philip May, until recently, Art and Capital's managing partner in Singapore, who now as a free agent can express his very strong opinions about current events in the investment migration market.
0:42
SPEAKER_02: We spoke to Philip about a number of recent developments and got his takes on issues like the European Parliamentary Research Services' calls for regulating taxing and generally discouraging investment migration in the EU.
0:56
SPEAKER_02: Also the ideological motivations behind the EU's opposition to CBI programs.
1:01
SPEAKER_02: We asked about how firms continue to get away with illegal discounting of CIPs despite CIU blacklisting, and we talked about Portugal's upcoming changes and how they will affect the program's competitive position within Europe as well as the relative popularity of the different options internally in Portugal.
1:21
SPEAKER_02: We also talked to Philippe about why he thinks that Latvia's golden visa is the world's most underrated.
1:28
SPEAKER_02: All of that and a great deal more in today's episode of the Mobility Standard.
1:32
SPEAKER_02: I'd like to remind you that you can follow all of IMI stories on our website, imidaily.com, on our mobile phone apps, in our free newsletters, as well as on your favorite social media network.
1:43
SPEAKER_02: You can also follow this podcast on Spotify, Apple Podcasts, and most other podcast platforms.
1:50
SPEAKER_02: With the preambles out of the way, let's get this show on the road.
1:59
SPEAKER_02: Philip, after you left Arden Capital, which is in August, I think, I think anybody who follows you on LinkedIn or Twitter or Facebook, where all you're quite active on all of those platforms.
2:12
SPEAKER_02: I think uh those of us who follow you, we will have noticed that you've been uh traveling around quite a bit since uh you ended your tenure with Arton.
2:23
SPEAKER_02: Are you just holidaying or is there some kind of pattern to your crisscrossing of the globe?
2:28
SPEAKER_00: No, no, there is a pattern.
2:30
SPEAKER_00: I do that uh uh in a professional way.
2:32
SPEAKER_00: It's not just holiday.
2:34
SPEAKER_00: Of course, when you're in Portugal and you are visiting uh a beautiful Quinta in the Doro Valley and you enjoy a David off there, that's holiday, but it's not all holiday.
2:45
SPEAKER_00: So I went to uh different uh countries that offer uh programs.
2:50
SPEAKER_00: I went to Latvia, I went to Portugal, I went to Turkey, both the European and the Asian part.
2:56
SPEAKER_00: So I was not in uh Europe only so far.
3:00
SPEAKER_00: Uh usually for work, in the sense that I want to get familiar with the country, with different stakeholders, I want to know how the banks work, what happens after somebody gets residence and or citizenship.
3:16
SPEAKER_00: What can they do?
3:17
SPEAKER_00: How does it look like?
3:18
SPEAKER_00: How is the real estate market?
3:20
SPEAKER_00: What can they do in terms of uh insurance, education?
3:25
SPEAKER_00: That's the purpose of my travel.
3:26
SPEAKER_00: And the travel continues.
3:28
SPEAKER_00: I'm in Zurich, Switzerland at the moment, and I will uh fly off uh Monday evening.
3:34
SPEAKER_00: And those who follow me on the social media they will see where uh my next trip takes me.
3:39
SPEAKER_00: I will reveal it, of course.
3:41
SPEAKER_00: Uh follow me, uh check my Twitter account, uh, end of next week, and you will know.
3:45
SPEAKER_02: You can go ahead and unplug your Twitter account right now.
3:48
SPEAKER_02: What is it?
3:48
SPEAKER_02: At Pmay.
3:50
SPEAKER_02: At H May underscore SG.
3:54
SPEAKER_02: At PH May underscore sg.
3:57
SPEAKER_02: All right, follow follow Philip May on Twitter.
4:00
SPEAKER_02: It's a very interesting account.
4:01
SPEAKER_01: That's a great uh strategy to actually go to the countries uh that we offer on our on our platform.
4:08
SPEAKER_01: Uh how many of how many countries have you been to that uh I mean I'm sure the the list is very robust, but is that something you kind of specifically do as part of your your excellent service to your your clients is actually visit these countries beforehand, or is that just something that occurred uh naturally?
4:28
SPEAKER_00: Well, at Arkham Capital, we always had offsite meetings once a year, uh as well as some other meetings, and those meetings usually took place in CBI or RBI countries.
4:42
SPEAKER_00: So Arkham Capital gave me the opportunity to see quite a few of them.
4:47
SPEAKER_00: For example, Montenegro.
4:48
SPEAKER_00: I have never been to Montenegro before, I've never been to the former Yugoslavia before.
4:53
SPEAKER_00: We had uh an off site there very successfully.
4:57
SPEAKER_00: Uh Bulgaria, I have been uh during my term with Ark and Capital.
5:03
SPEAKER_00: I went to Hungary as well.
5:05
SPEAKER_00: Um, now I'm visiting other countries, and uh I think it's more easy to say which CBI or RBI country I have not been so far.
5:14
SPEAKER_00: And the only one that comes to my mind, um the only two that come to my mind are Canada, although the QAIE pro QIIP program is uh on hold at the moment.
5:24
SPEAKER_00: I I never went to Canada.
5:26
SPEAKER_00: I I have been to the US, but not very much, and Malta.
5:30
SPEAKER_00: I've never been to Malta.
5:31
SPEAKER_00: Shame on me.
5:32
SPEAKER_00: I I want to go to Malta, it's a beautiful place.
5:34
SPEAKER_02: Shame on you, shame on you.
5:36
SPEAKER_00: Or um the program is not perfect.
5:40
SPEAKER_00: I don't like the publishing of the names of successful applicants, but that's a different story.
5:44
SPEAKER_00: I haven't built to Malta, I have to admit.
5:47
SPEAKER_00: I won't go there on this trip.
5:49
SPEAKER_00: It's uh almost November now, and I think the best time to visit the Mediterranean.
5:53
SPEAKER_02: We do have by the way, we do you say that's a different story, but uh we do have room in this format for different stories.
6:00
SPEAKER_02: So why don't you tell us um what are the things that you you don't like necessarily about that program in particular?
6:06
SPEAKER_02: Um I mean you have you have things that you dislike about every program.
6:09
SPEAKER_02: No program is perfect.
6:10
SPEAKER_02: I'm not trying to single out Malta, but but uh it would be interesting to hear what are you what you think are the drawbacks.
6:18
SPEAKER_00: The Malta program is particularly flawed by the fact that the names of all successful applicants are published.
6:28
SPEAKER_00: That does not happen in other jurisdictions, and now Malta even went a step further by announcing that they will not only publish the names of successful applicants, but they will actively, proactively inform their last country of tax residence.
6:47
SPEAKER_00: I don't see why uh that should be done.
6:50
SPEAKER_00: Uh I can be a tax resident of Dubai as a Singapore citizen, living there tax-free.
6:57
SPEAKER_00: And and if I get the citizenship in Malta, Singapore would have an issue with that because dual citizenship is not allowed in Singapore.
7:05
SPEAKER_00: But Malta would not inform Singapore, they would inform the UAE.
7:09
SPEAKER_00: Uh so what's the effect of that?
7:11
SPEAKER_00: Um, I think it doesn't do any good for Malta.
7:15
SPEAKER_00: Uh I can only guess why they did it.
7:18
SPEAKER_00: Maybe it was to uh appease uh some of those troublemakers in Brussels in the EU who always make noise about CBI programs.
7:29
SPEAKER_00: But if that was the purpose, it was not successful because these people are driven by ideological reasons, they will never give up.
7:38
SPEAKER_00: Um so that's definitely.
7:50
SPEAKER_02: So what do you think?
7:51
SPEAKER_02: I mean, I have my own theories, but I'm interested in hearing from from you what you think are the ideological motivations behind that.
8:02
SPEAKER_00: Well, uh you have uh a certain uh class of politicians that try to exploit the feelings uh of uh envy and jealousy of people by uh denigrating uh what they call the rich and uh all the industries that are associated with uh wealth, particularly the financial industry.
8:30
SPEAKER_00: You are just the rich guy to them, and uh they also start to question why you are uh having so much money and whether it's right and why others don't have, etc., etc.
8:42
SPEAKER_00: The feelings of guilt are always exploited by certain politicians, regardless of the industry in where uh in which you you made your money.
8:52
SPEAKER_02: I yeah, I think I've always argued that we should be entirely unapologetic about what we do in investment migration.
9:01
SPEAKER_02: It's not something we need to justify, it's not something that is that needs justification, it's something, it's a good, but I think you're right in that yes, um, there is this sort of uh quote-unquote class struggle type mentality.
9:16
SPEAKER_02: There is a lot of uh suspicion.
9:18
SPEAKER_02: And I think there are there are enterprising politicians out there that that do take advantage of sort of the base of the brain mammalian um amygdala response that people have sometimes to differences in in income.
9:35
SPEAKER_00: I also noticed that it's usually politicians who are in the opposition who voice their concerns.
9:42
SPEAKER_00: Once they are part of a government and they need to generate revenues for their generous tax and spend budgets, they take uh a more relaxed approach.
9:53
SPEAKER_00: It isn't shape for residents by investment.
9:56
SPEAKER_02: Absolutely, absolutely.
9:57
SPEAKER_02: It's it's easy to criticize the programs when you're in opposition, but it's hard to say no to all that revenue when you're actually holding the reins of power.
10:07
SPEAKER_02: I wanted to ask you, Rohelio, since Philip is doing his uh rumspringer in the investment migration destination countries.
10:15
SPEAKER_02: How many of how many of the main investment migration destinations uh have you visited?
10:23
SPEAKER_01: Very few.
10:24
SPEAKER_01: Uh I have not been to Portugal, I have not been to Malta, uh, I have not been to any of the Caribbean islands that I've been to some many islands, but none of the ones that uh offer CI CBI.
10:38
SPEAKER_02: Have you been to the what's the one, uh Jeffrey Epstein's island?
10:41
SPEAKER_02: You ever been there?
10:42
SPEAKER_01: Oh I missed the invite.
10:46
SPEAKER_01: I missed the invite.
10:49
SPEAKER_01: Uh but uh yeah, I mean, I thought the the the idea of having an off site in one of these countries each year is a great idea.
10:58
SPEAKER_01: We're having our first off site in this country of New York City.
11:02
SPEAKER_01: I'm not sure if you've heard of that country, but coming up in January.
11:05
SPEAKER_01: But I do plan to spend a lot more time on the road, although not as much to a wide variety of countries, more to specific countries like uh Philippe.
11:15
SPEAKER_01: So hey, we might we might cross paths here in the near future.
11:18
SPEAKER_02: Yeah.
11:19
SPEAKER_02: Uh well, a lot of this will depend on uh Philippe's answer to the following question.
11:24
SPEAKER_02: What are you doing next, Philippe?
11:27
SPEAKER_02: Are you gonna keep that a secret?
11:29
SPEAKER_02: Can what can you reveal?
11:30
SPEAKER_02: If anything, uh I'm sure you're not you're no slouch, I'm sure you're not just uh resting on your laurels.
11:37
SPEAKER_02: What can you tell us about what's next in your world?
11:41
SPEAKER_00: Well, I will make an announcement when time is right, um, but I'm still the honorary consul for St.
11:48
SPEAKER_00: Vincent and the Grenadines in Singapore.
11:50
SPEAKER_00: I keep that role.
11:52
SPEAKER_00: Of course, I I stay in Singapore and uh I will keep helping uh the existing clients and Dart and Capital to see their application go through.
12:03
SPEAKER_00: Uh anything else uh will be uh published on the social media at an appropriate time next year.
12:12
SPEAKER_02: And for a sponsored feature in IMI, I presume.
12:15
SPEAKER_02: Of course.
12:16
SPEAKER_02: You're the leading publication, IMI will always be in the loop.
12:22
SPEAKER_02: Thank you for saying that.
12:23
SPEAKER_02: You just earned yourself another invite back to the show.
12:26
SPEAKER_02: Um the um the European Parliament uh we saw this week.
12:32
SPEAKER_00: Uh well, I not the not please be correct.
12:35
SPEAKER_00: It's the EU Parliament, it's not Europe's parliament, it's the parliament of the EU, of the European Union, not of Europe.
12:43
SPEAKER_00: The EU is not Europe.
12:44
SPEAKER_02: That's correct.
12:45
SPEAKER_02: It's not the Parliament of Belarus, it's not the Parliament of Norway, it's not the Parliament of Iceland.
12:53
SPEAKER_02: Yes, that's uh completely correct.
12:55
SPEAKER_02: Although they call themselves the European Parliament.
12:57
SPEAKER_02: And in this case, in fact, it's not even the European Parliament, it's the European Parliament's in-house research service.
13:05
SPEAKER_02: Um, they published a study last week that said uh, well, it the premise that they began with is that investment migration is a problem that poses a number of issues.
13:18
SPEAKER_02: Um so already from the outset, uh that is that is presumed, or that's the assumption.
13:25
SPEAKER_02: Uh, and they then proceed to explore various avenues available to the European Union to quote unquote take action against such programs.
13:36
SPEAKER_02: And they had policy options that they outlined, and it it was taxing investment migration programs, regulating investment migration service providers.
13:49
SPEAKER_02: It was uh to impose uh on the different programs minimum physical presence requirements, restricting access for those who participate in citizenship by investment programs outside of Europe.
14:04
SPEAKER_00: First of all, it was not even the EU parliament, it was only a research group of the EU Parliament.
14:13
SPEAKER_00: Now, let's look at the EU Parliament first.
14:16
SPEAKER_00: What competence does this parliament have?
14:18
SPEAKER_00: Unlike many national parliaments, the competences of this parliament are very limited.
14:24
SPEAKER_00: The research group, well, many people, probably most people in the European Union don't even know that such a group exists.
14:31
SPEAKER_00: And the competences are certainly of a consultative nature only.
14:37
SPEAKER_00: So I'm not too concerned about what they are saying.
14:41
SPEAKER_00: Uh we would also have to look at how the research group came to this conclusion.
14:46
SPEAKER_00: Was it by majority who was absent in the crucial vote?
14:51
SPEAKER_00: Was there any vote?
14:53
SPEAKER_00: How did it come up?
14:55
SPEAKER_00: Now, back to the European Union's Parliament.
14:58
SPEAKER_00: Remember that this parliament does not have much credibility or competence over those issues.
15:06
SPEAKER_00: First of all, matters of citizenship are uh sovereign national matter of every EU member state.
15:14
SPEAKER_00: So the EU parliament has no say about that.
15:17
SPEAKER_00: When it comes to immigration, remember that the EU Parliament at once a few years back suggested that any outside country which does not treat all EU member states the same in terms of visa-free access should be uh excluded from the visa labor program to to the EU or to Schengen.
15:45
SPEAKER_00: But as of today, the USA, for example, still does not treat all the EU member states or EU member state citizens the same.
15:55
SPEAKER_00: Some EU citizens need a visa for the US and some they don't.
16:01
SPEAKER_02: Cyprus is a good example, correct?
16:04
SPEAKER_00: Exactly.
16:04
SPEAKER_00: Cyprus is one, uh Bulgaria is one, Romania is another one.
16:08
SPEAKER_00: I think there is a few more.
16:10
SPEAKER_00: And in spite of the EU parliament's clear call on sanctions against the US, nothing has happened at all.
16:22
SPEAKER_00: So if the EU does not take action on such an important matter, why would they bother with some far-flung uh uh small countries CBI program or uh uh meddle with the internal affairs of sovereign uh states like uh Portugal, Malta, etc.
16:41
SPEAKER_02: But I don't think that presumes that the European Union would apply its principles uniformly and in coherently, coherently.
16:54
SPEAKER_02: And of course, it's one thing to go up against the United States and say, hey, you guys are not keeping your promises, so now we're going to impose uh restrictions on your visa-free access to Europe.
17:05
SPEAKER_02: It's quite a different matter to do the same to a small island state in the Caribbean, no?
17:13
SPEAKER_00: Maybe, but then what's in for the EU?
17:16
SPEAKER_00: Why would they do it?
17:18
SPEAKER_00: There is nothing in for them, there is only something in for certain politicians who want their voice heard, who want to uh express themselves, who want to um canvas uh for votes, uh but for the EU or its member states, there is nothing in for punishing such countries or for taking actions against member states.
17:44
SPEAKER_00: Nothing at all.
17:46
SPEAKER_00: So I don't think they will follow up this report.
17:50
SPEAKER_00: Right.
17:50
SPEAKER_02: Okay, no, it yes, it's important to point out here that this was a report crafted by the research service of the European Parliament, not by the MEPs themselves.
18:03
SPEAKER_02: It's intended to inform the decision-making process, the work of MEPs, but they don't necessarily need to adopt any of the conclusions drawn by the process.
18:14
SPEAKER_02: Correct.
18:15
SPEAKER_00: We would also ask how the report was commissioned.
18:18
SPEAKER_00: Did anybody uh ask for such a report or did they come up with it by themselves?
18:24
SPEAKER_00: And how are the members of this uh uh study group uh chosen?
18:29
SPEAKER_00: Are they elected?
18:30
SPEAKER_00: Are they appointed?
18:31
SPEAKER_00: Uh, by who?
18:32
SPEAKER_00: I think it's a very uh uh fringe uh issue, a very uh unimportant development.
18:41
SPEAKER_02: Right.
18:41
SPEAKER_02: Uh I I think you're right about that.
18:43
SPEAKER_02: The the report in itself is not important.
18:47
SPEAKER_02: The it was crafted by well, uh people who have been hired by the European Parliament for the express purpose of doing research that will guide their work, the MEP's work.
19:01
SPEAKER_02: Uh, but these are not elected researchers, obviously.
19:05
SPEAKER_02: Uh, nonetheless, I think that it it does give some kind of guidance to you know what sort of considerations should MEPs make when looking at these questions.
19:20
SPEAKER_02: So it's it's only a threat to investment migration if and when they heed the recommendations other than this report.
19:30
SPEAKER_02: Would you agree with that, Philip?
19:32
SPEAKER_02: Correct.
19:33
SPEAKER_00: And I'd like to recall that the European Union has lost one of its key members, the UK, and key net payers.
19:46
SPEAKER_00: Uh Brussels, the Eurocrats, are uh in a tussle with major European countries like Poland, like Hungary.
19:56
SPEAKER_00: The EU has other problems than CBI for a few thousand people in some far-flung countries.
20:04
SPEAKER_02: Yeah, not to mention that they have uh much, much bigger flow of immigrants who naturalize and get EU citizenship through more conventional channels, like uh living there for a long time on a work visa or a student visa, or or getting married to an EU citizen.
20:23
SPEAKER_00: And obviously, here we're talking here we're talking about hundreds of thousands of people who definitely do and there is illegal immigration, completely uncontrolled immigration of people who don't even have documents, let alone uh underwent a due diligence process or provided a police record from their country of origin or residence.
20:46
SPEAKER_00: So again, the EU has bigger problems than residence by investment or citizenship by investment.
20:54
SPEAKER_02: Yeah, yeah.
20:55
SPEAKER_02: It's not like the North Africans that are landing on Lampedusa are bringing statements of source of funds with them, right?
21:02
SPEAKER_02: Yeah, definitely not.
21:05
SPEAKER_02: All right, I want to move on to uh a different CBI region, the Caribbean.
21:11
SPEAKER_02: Um, I interviewed Les Khan last week.
21:14
SPEAKER_02: We published uh that interview in IMI, and um the topic was well, we we spoke about a number of things, but what we focused on was uh blacklisting and discounting.
21:27
SPEAKER_02: And what occasioned that interview, uh or at least the topic of the interview, was a story we did with you, Philip and Sambayat uh about a week before that, in in which we outlined the the blacklists.
21:43
SPEAKER_02: So there are three countries, three CBI countries that have blacklists for service providers.
21:50
SPEAKER_02: And the first one was St.
21:51
SPEAKER_02: Kitts and Nevis, um, and they were followed by Dominica, which now also has a blacklist, but only one company uh named.
22:00
SPEAKER_02: On it, and then Malta has a blacklist with three different agents listed there.
22:07
SPEAKER_02: And essentially, what um Leskan is saying is look, if you are discounting, if you are sending clients offers or sending marketing emails that contain discounts on citizenship by investment in St.
22:22
SPEAKER_02: Kitts and Nevis, if it's below the government mandated price, then you will get blacklisted, presuming there is enough evidence, right?
22:32
SPEAKER_02: So the theory here is that if you get one of these emails saying that for 76,000 you can get citizenship in St.
22:40
SPEAKER_02: Kitts and Nevis for you and your family, you should just forward that to Les Kahn of the St.
22:46
SPEAKER_02: Kids CIU, and in theory, uh that company will then be blacklisted.
22:51
SPEAKER_02: What are you what was your reaction to to hearing uh Les Kahn's response, uh Philip?
22:56
SPEAKER_00: I was very happy to hear him saying that.
23:00
SPEAKER_00: Uh one of the major issues we face in our industry with residents and citizenship by investment agents that we have too many croups, we have too many unregulated and uh I would say almost uh uh unsavory, sometimes criminal uh elements in the industry, especially in Red China and in the UAE, you find a lot of rogue agents who lie, who cheat, and who don't give a damn about minimum amounts, about uh CBI units, um, who just want to defraud their clients or to undercut prices uh in order to make a quick buck.
23:47
SPEAKER_00: These kind of actors have to be weeded out.
23:51
SPEAKER_00: And blacklisting, if that term is still uh politically correct, uh, is one uh way to get rid of them.
24:01
SPEAKER_00: Uh another way is to have uh an industry association with uh members that can be also excluded or delisted as members.
24:10
SPEAKER_00: That's another way of shaming raw agents.
24:14
SPEAKER_00: But we must do something in the industry.
24:17
SPEAKER_00: All the stakeholders must work together.
24:20
SPEAKER_00: The units, we may call them regulators.
24:23
SPEAKER_00: Les Kahn is uh an excellent uh representative of that part of the industry, the industry association, as well as the companies themselves.
24:32
SPEAKER_00: We must name and shame those who lie and cheat and who undercut because they are not only a threat to the reputation of the industry, but to the very core of the programs themselves.
24:47
SPEAKER_00: We cannot let this go on, and the stronger uh action is taken, the better for all of us.
24:55
SPEAKER_01: I have a uh and I echo those sentiments, but as someone relatively new to the industry, uh what is the this thing that uh was mentioned here in the article on discounting?
25:09
SPEAKER_01: What's the kind of overall process?
25:12
SPEAKER_01: How prevalent is it?
25:13
SPEAKER_01: Is this something that happens once in a while, or is this kind of a main kind of uh activity that's done here in uh in this part of the world in the Caribbean?
25:22
SPEAKER_02: Okay, so this uh very often takes place under the real estate option.
25:27
SPEAKER_02: So under the real estate option, what'll happen is you know the client will will make a requisite investment, but say say that the real estate option is 200,000, and then the client is told, okay, you only have to pay us 80,000, and then the then the agent or the developer or the or both of them in collusion, they um they take the the remaining amount.
25:54
SPEAKER_02: So if if it's 200,000, then there's 120 missing if the client is only paid in 80, right?
26:00
SPEAKER_02: So um the developer and the agent they come up with 120 grand, and now they put all that money into escrow and say, okay, this client is applying for uh citizenship by investment, and he's investing in such and such real estate uh development.
26:19
SPEAKER_02: Yeah, here's the proof the money is in escrow.
26:22
SPEAKER_02: Uh then they they let the CIU do its processing, and the CIU uh eventually approves it in principle, and then uh the money uh is is released from escrow, but the developer crucially doesn't build uh anything or they pretend to build that's the scheme.
26:44
SPEAKER_00: Correct.
26:45
SPEAKER_00: That's one scheme.
26:46
SPEAKER_00: Another one is that uh donation amount for a certain family configuration is say 150,000 US dollar, and uh a raw gent uh promises a client to do it at the$100,000.
27:00
SPEAKER_00: Of course, on top of the$150 or hundreds, there is uh there is uh fees, due diligence fees, government fees, service fees, etc., of let's say 40 or 50,000.
27:14
SPEAKER_00: Client pays those, believing that once approved, he will have to pay only 100.
27:20
SPEAKER_00: And then uh later on, uh during the the processing of the application, the wrong agent tells the client, oh, sorry, uh amount has changed now, it's not only a hundred anymore, now it's 150.
27:33
SPEAKER_00: And the client has no recourse, has no no chance to oppose with that.
27:38
SPEAKER_01: Brutal.
27:40
SPEAKER_01: You think one you do that once, and that client's gonna tell.
27:45
SPEAKER_00: No, that's the problem.
27:47
SPEAKER_00: Watch out.
27:48
SPEAKER_00: China is a big country, and dual citizenship is not allowed in mainland China.
27:54
SPEAKER_00: So the defrauded in Western migrant, the cheated client is not going to tell everyone, hey, I was trying to get the second passport and I got cheated.
28:07
SPEAKER_00: First, he won't do it because he's not even supposed to get the second passport, unless he would be ready to renounce the Chinese citizenship.
28:15
SPEAKER_00: And secondly, uh he's ashamed of having been cheated.
28:20
SPEAKER_00: It's very common in China, but the people there, well, not only there, but particularly there, they they like to talk about their success, about their good stories.
28:31
SPEAKER_00: Nobody likes to talk about his failures or getting cheated, so they won't make noise.
28:37
SPEAKER_00: Maybe some other potential clients in the same town or city hear about it, but China is big.
28:43
SPEAKER_00: The fraud on date can move to the next uh five million city.
28:47
SPEAKER_00: No problem.
28:48
SPEAKER_02: Yeah, so in those cases, you're sort of protected by the client's desire to save face.
28:53
SPEAKER_02: But uh on the on the real estate side, uh what happens often is that it actually it actually works, right?
29:01
SPEAKER_02: So this this uh money in and out of escrow, nothing ever getting built, but the client does end up getting citizenship, it does end up getting approved, and he only paid 80,000, right?
29:13
SPEAKER_01: Um the system in the US, the there has to be proof that something was built, that the jobs were created, and that the at the 829s when it becomes a permanent green card, that uh you know an accounting of how the money was used.
29:28
SPEAKER_01: Here, it seems like you get the approval based on an escrow account, and whether it gets built or not, that's not really part of the uh equation.
29:38
SPEAKER_02: Right.
29:39
SPEAKER_02: So, as as Leskan mentioned in the interview, though those days are over, right?
29:43
SPEAKER_02: Now you have an escrow law in St.
29:46
SPEAKER_02: Kitts and Nevis with uh strict payout schedules so that the developer actually gets so if a client invests in say a hotel development, then the money is released in stages from escrow according to um the the the progress of the progress of the development.
30:08
SPEAKER_02: So you can't just collect money and then not build, you have to you have to be building.
30:14
SPEAKER_02: And and as you know, one of the results we've seen is a reduction in the number of approved real estate developments in um St.
30:22
SPEAKER_02: Kitts and Nevis.
30:23
SPEAKER_02: So anyway, Philip, you you said that the number is too low, 16 worldwide is too low.
30:30
SPEAKER_02: Um why do you say that?
30:32
SPEAKER_02: Do you do you see this from a lot of different companies?
30:36
SPEAKER_00: Yes, I'm based in Singapore, and there is not much hanky panky going on in Singapore itself.
30:43
SPEAKER_00: And the the actors in the market, the intermediaries, the investors are quite sophisticated.
30:49
SPEAKER_00: Um, but uh Singapore is very close to mainland China, it's close to the Middle East.
30:56
SPEAKER_00: I see what's going on there, and uh I have seen all sorts of scams, undercutting uh offers of programs that do not even exist.
31:08
SPEAKER_00: I have seen very properly uh glossy, uh properly developed uh glossy brochures about citizenship in countries like Argentina or Croatia.
31:22
SPEAKER_00: And uh these uh agents they talk about it uh openly.
31:27
SPEAKER_00: So they are not hiding, they produce brochures, often in Chinese only, of course.
31:34
SPEAKER_00: Um but these companies must be exposed.
31:38
SPEAKER_00: Uh if they uh cheat on an existing program, it's relatively easy for the regulator in that country to blacklist them.
31:46
SPEAKER_00: If they offer programs that do not even exist, it's a bit more difficult.
31:50
SPEAKER_00: I think then it's uh the job of an industry association to expose them.
31:55
SPEAKER_00: But I see that all the time.
31:57
SPEAKER_00: I see it myself, I see it on social media.
32:00
SPEAKER_00: I I read and speak some Chinese, so I can see myself what's going on.
32:05
SPEAKER_00: But there is also clients who tell me about it and friends uh in the industry and the financial industry and the legal industry who report such incidents to me.
32:15
SPEAKER_00: And uh it's rampant, it's it's rife in uh in mainland China, in the UE, a bit less in India, uh, but it's happening all the time.
32:26
SPEAKER_00: Even in Vietnam, you see it happening, and it's no good.
32:29
SPEAKER_00: I'm grateful to Les Kahn for uh taking action and for not only speaking out against it, but for implementing uh changes and for uh tracking those uh those groups by a stronger hand in the end.
32:48
SPEAKER_02: You talk about receiving offers from CBI programs that don't exist, but you wouldn't believe how I mean some people have no compunction about these scams.
32:59
SPEAKER_02: Uh I've received, I mean, admittedly, on very few occasions, I've received offers for for CBI from countries that don't exist.
33:09
SPEAKER_02: Um yeah, I've received, you know, citizenship by investment in Yugoslavia, Czechoslovakia.
33:16
SPEAKER_02: I've I've seen these, you know.
33:18
SPEAKER_02: So uh obviously, in that case, it's a little more difficult to sympathize with the victim of the fraud because uh frankly, correct uh a fool and his money should go separate ways, even if yeah, it's it's heinous in any case.
33:32
SPEAKER_02: Okay, so suffice it to say that it happens on far too many occasions, and that let's hope that those blacklists grow, uh become longer, and become an actually effective deterrent to these types of practices.
33:46
SPEAKER_02: Um another country I want to talk about, which is um I know it's one of your favorite programs, Philip, and and uh one of your favorites as well, Roelio.
34:00
SPEAKER_02: It has certain uh competitive advantages that are very, very difficult to beat, and it's uh the Portuguese Golden Visa.
34:08
SPEAKER_02: Um, of course, it's uh it's going to change now after Christmas, so after the new year, um we're gonna see the the price go up for some categories.
34:18
SPEAKER_02: We're gonna see um the uh the hottest invest the hottest uh property investment uh markets in the country are going to be excluded, at least from the direct investment in residential real estate.
34:33
SPEAKER_02: So you can't be can't do that anymore in Lisbon and in Porto and then the Algarve coast.
34:40
SPEAKER_02: Um are you sure?
34:42
SPEAKER_02: Is that gazetted already?
34:45
SPEAKER_02: So yes, uh you if it's I believe it is if it's in touristic properties, then you can still do it in those cities.
34:53
SPEAKER_02: Um if not, then you're gonna have to go to the um I don't want to say the boonies, but um you definitely have to, you you can't be in the middle of Lisbon anymore.
35:06
SPEAKER_00: Yeah, it's a market consensus.
35:08
SPEAKER_00: Everybody believes that these changes will kick in the end of the year, but I'm not sure whether it's legally uh binding already, or maybe there is uh a delay of the implementation of changes.
35:22
SPEAKER_02: It can be you think you think that's a possibility?
35:25
SPEAKER_02: I mean, because they've already they've already issued, I mean, a long time ago they already published uh a list of all the the different regions that will qualify and will not qualify, and the ones that will have uh conditional qualification.
35:41
SPEAKER_02: That's a good question, and I I don't have a clear answer.
35:44
SPEAKER_00: Me neither.
35:45
SPEAKER_00: I'm not sure, but I I just uh haven't had an ironclad proof that it will kick in end of the year.
35:53
SPEAKER_00: Everybody believes that, I believe so too, but I'm not 100% sure.
35:57
SPEAKER_00: Anyway, let's assume these changes come.
36:00
SPEAKER_00: Um what's the question on that?
36:02
SPEAKER_00: Uh, what do you want to know?
36:03
SPEAKER_00: Do you think do you want to know whether uh they are good or no good?
36:07
SPEAKER_02: Or what no, what I want to know, yeah, I don't think uh we need to discuss whether they are good or not good.
36:12
SPEAKER_02: Let's just accept them as a fact of life and focus on you know what effect will they have and how can investment migration practitioners and clients prepare themselves for it.
36:24
SPEAKER_02: So, first of all, okay, which of the investment routes do you think will be the relative winners and losers of those changes?
36:33
SPEAKER_02: So obviously, funds will become more expensive, uh, it'll move from the 350,000 that it is today up to 500,000.
36:41
SPEAKER_02: Um, you won't be able to invest in directly invest in your own personal apartment, let's say, in in the top-tier destinations of the country, although you could still do it outside of those.
36:54
SPEAKER_02: And you you can invest in commercial hospitality uh projects still in Lisbon, Porto, and the Algarve.
37:02
SPEAKER_00: In my opinion, these rather minor changes won't have uh much of an effect.
37:11
SPEAKER_00: I wouldn't say they have no effect at all, of course.
37:13
SPEAKER_00: There is an effect, there is a bit of shifting of the uh the options, but overall the effect will be very, very small because the Portuguese Golden Visa program will remain by far the most popular option in Europe, in Schengen, for those investor migrants who eventually want to get an EU citizenship.
37:40
SPEAKER_00: People are not going to invest in Spain or in Italy instead.
37:44
SPEAKER_00: Of course, those who are not after citizenship, who just want to get the residence, uh they may uh shift to countries like Latvia.
37:53
SPEAKER_00: Uh, but those who eventually want to get the citizenship either for themselves or for their children, they will still go to Portugal, regardless of the slightly uh increased uh investment requirement.
38:08
SPEAKER_02: Well, those people who are price sensitive and who don't necessarily need to have a path to citizenship, they are probably already going to Greece, don't you think?
38:20
SPEAKER_00: Possibly, possibly.
38:22
SPEAKER_00: Greece is not a good program, in my opinion, in my humble opinion, because it's almost the same price as Portugal at 250,000 euro, and it does not really lead to citizenship, unless, of course, if you speak fluent Greek and you live there full-time and you pay high taxes in Greece, etc.
38:45
SPEAKER_00: etc.
38:46
SPEAKER_00: But then uh there is uh the Latvian program, which is uh even cheaper than the Greek one, which does not lead to citizenship either.
38:57
SPEAKER_00: I don't see any advantage of Greece over Latvia.
39:00
SPEAKER_00: I think the price-sensitive people who are just after a residence within the Schengen zone, they will go to Latvia rather than to Greece.
39:10
SPEAKER_02: Obviously, right now But right now, Philip, uh the Latvian program is virtually dead, whereas the Greek program is very much alive.
39:21
SPEAKER_00: Well, let me finish.
39:23
SPEAKER_00: The Greek program is heavily marketed by real estate agents who get hefty commission on the real estate that they sell to investor migrants.
39:35
SPEAKER_00: And in Latvia, the real estate option is not uh very popular and much more uh uh costly than the company investment option, but that option is not heavily marketed because there is not so much money for the agent.
39:51
SPEAKER_00: That's why Greece is more popular, and let's face it, everybody knows it's Greece.
39:56
SPEAKER_00: Greece is the heart and soul of Europe, it's the birthplace of European culture and democracy, while Latvia is a slightly obscure small uh country on the fringe.
40:12
SPEAKER_02: I hope there are no Latvians listening.
40:18
SPEAKER_00: But if you look at uh uh from a neutral perspective without any sentiments, Latvia is the better deal, and people will realize that uh over the time, but it's not well marketed because there is less in for the agents, so Greece attracts more people, but then uh it doesn't rock the boat in Portugal.
40:38
SPEAKER_00: Portugal will remain by far the most attractive, and most investors who do choose Portugal they want citizenship at the end of the day, anyway.
40:48
SPEAKER_01: Okay, so let's talk about that assumption because I'm looking at a table here.
40:53
SPEAKER_01: Uh the 280 option, is that still gonna remain at 280 or is that gonna go to 350?
40:58
SPEAKER_01: No, that that'll remain.
41:01
SPEAKER_01: So when you increase the price on anything, especially in investment migration, uh the effects almost always uh are negative from an overall demand.
41:11
SPEAKER_01: It takes a while for the market to adjust, for people to kind of forget that they could have had a better deal six months ago, et cetera.
41:19
SPEAKER_01: You guys feel that when the price goes up to 500 and now is compared, there's no price arbitrage between Portugal fund and other opportunities.
41:30
SPEAKER_01: Why will Portugal continue to be the number one option?
41:34
SPEAKER_01: On the property side, the the cost involved in the property maintenance and the taxes adds up.
41:40
SPEAKER_01: So what's the rationale for Portugal continuing to be the number one uh option after?
41:46
SPEAKER_00: First of all, first of all, to most investor migrants who choose Portugal, the difference between 350 and 500 grand isn't that significant.
41:56
SPEAKER_00: We are dealing with a lot of high net worth individuals, six and seven-digit entrepreneurs who don't really mind about uh 150,000 more or less.
42:08
SPEAKER_00: And don't forget, Portugal has become a brand.
42:13
SPEAKER_00: There has already been the first generation of investor migrants who got naturalized based on their golden visa investments.
42:22
SPEAKER_00: These Investor migrants are testimony for the quality of the Portuguese program.
42:29
SPEAKER_00: While in Greece, almost nobody, if anyone, got citizenship.
42:34
SPEAKER_00: So I'm not saying there is no effect, there is no change at all.
42:39
SPEAKER_00: There may be a few price-sensitive people uh choosing Greece, uh, although more should actually choose Latvia, in my opinion.
42:50
SPEAKER_00: There may be some who ditch the fund option in Portugal and go for real estate instead, but there is still a lot who say, well, 350, 500, who cares?
43:01
SPEAKER_00: And I want my money in an investment fund that is listed that I can sell the next day and not in a real estate which may take weeks or months to sell if I want to cash out.
43:11
SPEAKER_00: So the changes, in my opinion, are not significant enough to rock the boat and to to change the patterns of investment migration in Europe.
43:23
SPEAKER_02: Okay, so that deals with the external effects uh of the changes, the the effect on Portugal's competitive position within the European golden visa market.
43:34
SPEAKER_02: But what about internally within the Portuguese program?
43:38
SPEAKER_02: The change how will the changes affect the balance in terms of applicant preferences within that single program?
43:47
SPEAKER_02: So, which of the investment options will be the winner ultimately of these changes?
43:52
SPEAKER_00: The vast majority of In Western America chooses the real estate option because that's the most marketed.
44:00
SPEAKER_00: Technically, this option becomes even more attractive compared to the other options.
44:06
SPEAKER_00: But on the other hand, more people get even aware of the other options.
44:11
SPEAKER_00: So you have two trends.
44:13
SPEAKER_00: On one hand, real estate option becomes more attractive in comparison to the fund.
44:19
SPEAKER_00: On the other hand, our very discussion here, highlighting the existence of two options, in fact, there is even more, raises a certain awareness among investor migrants, which may offset the effect of the changes discussed earlier.
44:38
SPEAKER_00: Most people who decide to go for the Portugal visa, Golden Visa program, do not even know that the fund option exists.
44:48
SPEAKER_00: A few sophisticated ones, yes, they do, but you have very few players in the market who proactively offer the fund options, and you have a lot of previous investors who chose the fund option successfully and who will convince that this is the best option before the next generation even starts thinking about which option to take.
45:11
SPEAKER_02: Yeah, and I think we should also point out here that even though you may be investing in a fund, technically speaking, there is a probably a seven or eight in ten chance that uh at the end of the day you're still investing in real estate just uh indirectly, right?
45:29
SPEAKER_02: Because most of these funds are real estate-based funds, and the real estate is predominantly held over.
45:36
SPEAKER_01: Sorry?
45:44
SPEAKER_01: Portugal allows investors to invest in funds that don't a hundred percent allocate their funds only to Portugal.
45:52
SPEAKER_01: That's funds out there that are listed that you can put X amount in the 350, and not all the 350 goes for the benefit of Portugal.
46:01
SPEAKER_01: Is there any minimum threshold?
46:04
SPEAKER_02: Yeah, I believe it's a I believe it's a 6040 split.
46:09
SPEAKER_02: Wow.
46:10
SPEAKER_01: Why would Portugal allow that?
46:13
SPEAKER_01: What's what's in it for Portugal for that money to go into US venture capital or European 60 percent 60 percent is in for Portugal.
46:24
SPEAKER_01: Why would they do that if it's such a great country?
46:27
SPEAKER_01: Shouldn't they exercise that market power and elevate that percentage?
46:32
SPEAKER_00: But again, most of um investors who choose Portugal are not concerned about those details.
46:38
SPEAKER_00: They are not even overly concerned about the total amount.
46:41
SPEAKER_00: What they are concerned about is the credibility of the program, of the country, the quality of life, rule of law.
46:49
SPEAKER_00: All these things are there in Portugal.
46:51
SPEAKER_00: Portugal has an excellent track record.
46:53
SPEAKER_00: Portugal is a beautiful country.
46:54
SPEAKER_00: I've spent three weeks in Portugal last month.
46:57
SPEAKER_00: That's just as important, if not even more important, than those financial details, whether the fund invests 60 or 70 percent in Portugal and the rest outside, that's of a minor concern to most uh in Western migrants, I'd say.
47:12
SPEAKER_01: Maybe the ones that you deal with.
47:14
SPEAKER_01: I think on the US side they're very uh oriented around uh the allocation of their capital on how wealthy they are.
47:22
SPEAKER_01: The wealthier you are, the more you look at the details of my experience.
47:26
SPEAKER_02: Uh so um the last thing I wanted to talk to you about, Philip, is uh a question that I didn't I didn't come up with this question.
47:34
SPEAKER_02: It was raised to me uh by Parvis Balakuti.
47:39
SPEAKER_02: Uh just a shout out to you, Parvis.
47:41
SPEAKER_02: Thank you for formulating an interesting question.
47:44
SPEAKER_02: I'm gonna raise it to you now, Philippe.
47:46
SPEAKER_02: And it's uh if you started out stateless, but with a million dollars in liquid assets to spend exclusively on residence and citizenship by investment, how would you spend it?
47:59
SPEAKER_02: And I'd like you to explain uh how you would proceed and the timeline and the reasoning behind your decision.
48:08
SPEAKER_00: Okay.
48:09
SPEAKER_00: If I were stateless, the first country I would go to get citizenship and to shut off my statelessness is Wanuatu.
48:20
SPEAKER_00: Because Vanuatu is one of the few countries that even accepts stateless applicants.
48:27
SPEAKER_00: In many other CBI countries, stateless people cannot apply, especially if they don't have a birth certificate.
48:35
SPEAKER_00: That's a technicality, but it's very crucial for stateless people.
48:39
SPEAKER_00: First, I go to Vanuatu in order to get AC citizenship.
48:45
SPEAKER_00: Another advantage of Vanuatu is that it's in the Pacific region and it's the only program there.
48:51
SPEAKER_00: So that region is covered, and if uh if there is any issue in the Western Hemisphere, you can move to the South Pacific.
49:00
SPEAKER_00: Second, I would get residents in uh Portugal, uh a residence that may convert to citizenship five years later, and as a backup for residents in Europe, I would take at a much lower cost, obviously, residence in Latvia.
49:23
SPEAKER_00: Then uh I not only have a passport that I can travel with visa-free to many countries, but I also have a residence in two Schengen countries so that I can spend an unlimited amount of time within the Schengen zone of Europe.
49:39
SPEAKER_00: That comes in very handy, and I still have some money left, and uh I would take it to get uh another citizenship in a Caribbean country.
49:52
SPEAKER_00: I would probably choose Antigua and Barbuda or St.
49:57
SPEAKER_00: Lucia.
49:58
SPEAKER_00: That depends a bit on my family situation, maybe on my mood to these two countries that are very similar, but it could be any of the Caribbean countries, to be honest.
50:09
SPEAKER_00: Uh and with the remaining uh money, uh I would how much do you have left now?
50:15
SPEAKER_02: How much do you have left?
50:16
SPEAKER_00: Okay, we have we have say if I'm a single applicant, we have about 150 in the US in Vanuatu, uh about 400 um euro in Portugal, uh about 100 uh grand euro in Latvia, um, and another 150 in the Caribbean.
50:37
SPEAKER_00: So so we have a bit of cash left.
50:38
SPEAKER_00: You have about 100 left, right?
50:40
SPEAKER_00: Exactly.
50:41
SPEAKER_00: And I would take that and go to South America and take up residence uh in Uruguay so that I have the Pacific, Europe, uh the Caribbean, and South America covered.
50:58
SPEAKER_00: I can stay in any of these regions, Northern Hemisphere, Southern Hemisphere, uh, east, west.
51:05
SPEAKER_00: Uh I think that's what I would do if I were stateless and had one million dollars to spend on CBI.
51:12
SPEAKER_02: So so let me ask you this then.
51:14
SPEAKER_02: Why why would you, if you already have a European residence permit in Portugal with the path to citizenship, why Latvia?
51:22
SPEAKER_00: As a backup, simply as a backup.
51:25
SPEAKER_00: Uh, usually the people who choose Latvia are people who are not aiming at citizenship, who are happy enough to have a residence in the Schengen zone.
51:38
SPEAKER_00: Um, but in this case, uh let me ask you the other way around, what else should I do if I had a hundred thousand left?
51:46
SPEAKER_00: A second citizenship in the Caribbean doesn't change much.
51:50
SPEAKER_00: Um, but the second one within the Schengen zone comes in handy uh in case you want to make sure that any change to the program or any issues you may face uh in Portugal affects your residency status there.
52:06
SPEAKER_00: So better uh take both uh to be safe.
52:11
SPEAKER_02: Yeah, maybe I would so it's a good question.
52:14
SPEAKER_02: What else should you do with that money?
52:16
SPEAKER_02: Um maybe I would use it to start a rates are are reasonable.
52:22
SPEAKER_00: Um I've also been there uh last month for the first time, but it's definitely a place you can spend an expanded extended period of time.
52:32
SPEAKER_00: Uh it's it's quiet, it's serene, it's uh very European vibe, very different from the from the big and crowded uh metropolis like London or Paris.
52:44
SPEAKER_00: Uh good place to to chill out, a good place uh to pay tax as well.
52:49
SPEAKER_00: Uh rates are reasonable, uh friendly people, um safe, it's very safe.
52:56
SPEAKER_00: Not that Portugal is not safe, Portugal is pretty safe too, but Latvia is quite extraordinary in uh in a European context.
53:04
SPEAKER_00: Latvia is the kind of country where you can send out your your kids uh at nine in the evening to go around the corner to buy some groceries and you don't have to worry about anything.
53:15
SPEAKER_00: Um, so happy to be a resident there, even if I already have a golden visa in Portugal.
53:22
SPEAKER_02: Would you say that uh the Latvian Golden Visa is the world's most underrated golden visa?
53:29
SPEAKER_00: Yes, you can say that.
53:31
SPEAKER_00: That's the discovery of my trip to Latvia.
53:35
SPEAKER_02: That's it for today, folks.
53:37
SPEAKER_02: But we'll be back soon with another episode of the Mobility Standard.
53:41
SPEAKER_02: In the meantime, I encourage you, the listener, to send us the questions you have about investment migration.
53:47
SPEAKER_02: If we're able to answer them, we'll do so during our next episode.
53:51
SPEAKER_02: I want to remind you to follow our work on imidaily.com, the world's number one publication for investment migration, home to the internet's greatest collection of investment migration data, real estate, expert opinion, and the intelligence you need to be a successful investment migration professional.
54:09
SPEAKER_02: Thank you for listening.