Ireland has decided to end its Immigrant Investor Program (IIP) with effect from February 15.
Ireland’s IIP offered a fast-track route to permanent residence with multiple options for investment immigrants.
Investors could choose to invest €1 million in Irish firms or funds for a period of three years, €2 million in property funds or make a donation or contribution of €500,000 for philanthropic or civil society causes.
Though unconfirmed, the trigger for this abrupt move seems to be a confidential memo that highlighted the dominance of investors from China and the lack of tangible economic value, including job creation, from the investments.
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The Chinese Factor
Although the government denied that any particular concern led to the program’s termination, the fact that it was dominated by Chinese applicants certainly seems to have contributed to the decision.
Since its introduction in 2012, more than 1,610 applicants have qualified for Irish permanent residence through the IIP. Around 94 percent of the successful investors were from a single country: China.
In its first year, the IIP received 37 percent of the total investments from Chinese applicants. At the time of the program’s termination, this figure stood at 90 percent.
The primary concern about China’s dominance seems to be the difficulties involved in conducting effective due diligence.
No Tangible Economic Benefits
Another factor that seems to have prompted this drastic move is the lack of tangible economic value from the investments received.
Although the program offers multiple options, more and more investors were preferring the philanthropic route to qualify for permanent residence. This led to concerns that the Irish economy was not receiving any significant benefit in exchange of providing fast-track permanent residence to investors.
The recent confidential memo highlighted that investors with little connection to Ireland and without any real investment strategy were passively pouring funds into civil society endowments to qualify for permanent residence.
Critics Cheer the Move
Golden visa programs have long been the target of stringent criticism by the European Parliament for risks related to national security, money laundering, and corruption.
Ireland’s decision comes ahead of an EU law that mandates the investigation of investments in excess of €2 million from non-EU citizens in critical infrastructure, data, media, technology, and other sectors.
The government acknowledged the concerns of the EU and the OECD and indicated that a thorough review considering both internal and external factors led to the decision.
The Way Ahead
With Portugal following suit and Spain likely to restrict real estate investments, EU golden visa investors suddenly have fewer options to invest their way to fast-track permanent residence.
Ireland’s move is significant because the decision was prompted by an internal review rather than external pressure following a scandal or a scam, which was the trigger for Cyprus’ decision to terminate its citizenship by investment program.
With the government silent on chances of a reworked or revamped program, it’s likely that Ireland’s decade-old tryst with investment immigration has ended.