During the 10th Global Residence and Citizenship Conference in London organized by Henley & Partners, Wealth Management Analyst Nicole Douglas spoke with conference moderator and CEO of the IMC Bruno L’ecuyer on citizenship-by-investment programs.
What is the Investment Migration Council and its mission?
The IMC was set up just over two years ago to provide a global framework of standards for the investor immigration and citizenship-by-investment industry. We bring together the academics who are very much involved in providing consultancy to governments and writing legislation about various topics; professionals who typically include private bankers, wealth managers, citizenship planning experts, lawyers, and accountants; and governments that take an active interest in what we do in setting the standards for the industry.
Can you shed some light on the history of the industry?
This industry goes back thousands of years, but the modern version came about in the early 1980s when St Kitts launched a citizenship-by-investment program. In 2008 several small economies suffered tremendously from the financial crisis and faced a sudden lack of foreign direct investment. They naturally looked for new streams of quality investment, one of those being citizenship or residency through investment. Some countries have created good programs while others have not, being rushed in their creation and open to potential transparency and corruption issues, as evidenced by recent reports.
Have the IMC’s standards been effective? Have governments made changes to their programs?
In the two years since the IMC was set up, we have seen a shift by governments and by practitioners to act more like regulated professionals and to ensure that there are standards within the industry. Governments want to protect the quality of their programs because some provide visa-free access to the EU but also to Canada and to the US. The US has a responsibility to ensure that the people who are part of a visa-waiver program enter the US without requiring further due diligence. We believe the sustainability of the industry needs to be built on its reputation and strong regulation, to ensure a robust industry that is recognized for the very valid contribution it makes to strengthening economies.
In light of Brexit, would the UK modify its own program to incentivize HNW individuals?
Absolutely, these are market forces. The UK is one of the top three destinations for foreigners, alongside the US and Canada. Brexit or not, the UK will remain an attractive country in which to settle and seek good quality education. I think there will be changes to how the UK structures its various programs; no major changes have yet been announced, but when they are, all indications lead to even better opportunities for third-country nationals to settle in the UK.
What is the greatest challenge stakeholders face when developing a citizenship-by-investment program?
One of the most significant challenges they have is how to begin the process to ensure the outcome meets their goals. It is often a steep learning curve for governments that have no experience in this highly specialized field.
How have industry standards impacted the global migration of HNW investors specifically?
There has been a push to set a global framework for industry standards, driven in part by the industry but also to help consumers categorize service providers and programs. We continue to work very hard to promote best practice among our members and the wider citizenship-by-investment industry. What we are seeing now is [HNW clients] coming to the IMC and asking us to recommend service providers that will be fit and proper to help them in their projects. Governments are likewise interested in implementing specific standards for the agents to follow, providing better transparency and assurance for clients.
By Nicole Douglas, Wealth Management Analyst