Our guest on the Mobility Standard podcast this week is Philippe May, until recently the Managing Partner of Arton Capital in Singapore who is now a free agent with big – although secret – plans, and strong opinions on current events in the investment migration market.
EPRS report on EU investment migration programs “a fringe issue”
Commenting on the European Parliament Research Service’s recent report, which proposed five different policy options the EU could use to “take action” against investment migration programs in Europe, May dismissed the study as inconsequential.
“First of all, it was not even the European Parliament. It was only a research group of the European Parliament. What competencies does the European Parliament have? Unlike many national parliaments, the competencies of this Parliament are very limited. And their research group? Well, most people in the EU probably don’t even know that such a group exists and its competencies are certainly of a consultative nature only. So I’m not too concerned about what it’s saying.”
Noting that the EU still has no authority, according to the European treaties, to influence individual member states’ decisions on naturalization and taxation, May characterized the report as “a fringe issue; a very unimportant development.”
The EU, he says, has much bigger fish to fry than the citizenships granted to a few thousand people a year, highlighting the hundreds of thousands of unvetted individuals who become naturalized EU citizens each year through more conventional channels, like time spent in the country or marriage to a citizen, not to mention the uncontrolled flow of illegal immigrants without any documents whatsoever.
EU campaign against CBI is “driven by ideology”
He’s also disappointed in Malta’s recent decision to share tax residency information on CBI investors with the individual’s most recent jurisdiction of tax residency. May surmised that what motivated that decision, which he indicated made little practical sense, was meant to “appease some of those troublemakers in Brussels who always make noise about CBI programs.”
If appeasing the EU was Malta’s goal, he says, it was unsuccessful because “these people are driven by ideology. They will never give up.”
Questioned as to what he thought those ideological motivations were, precisely, May intimated they were a means for scrupulous politicians to broaden their influence.
“You have a certain class of politicians that try to exploit the feelings of envy and jealousy among people by denigrating what they call ‘the rich’ and all the industries that are associated with wealth.”
Firms openly offering illegal discounts: “They are not hiding” and “must be exposed”
In an IMI article featuring Philippe May and Sam Bayat last month, the two industry veterans expressed dismay at the continued presence of illegal discounting among CBI agents internationally. In an exclusive interview with Les Khan, head of the Saint Kitts & Nevis CIU, last week, we took the opportunity to ask what was being done to counteract such practices. Khan stated categorically that when evidence of illegal discounting is incontrovertible, the offending firms will get blacklisted.
We asked May what he thought of Khan’s statements in the interview.
“I was very happy to hear him say that. One of the major issues we face in our industry with RCBI agents is that we have too many crooks. We have too many unregulated and, I would say, almost unsavory, sometimes criminal 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 CIUs, who just want to defraud their clients or to undercut prices to make a quick buck. These kinds of actors have to be weeded out and blacklist is one way to get rid of them.”
Such mischief, he indicated, amounted to an existential threat for the investment migration industry.
“We must do something, together, in the industry. […] 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. We cannot let this go on. And the stronger action is taken, the better for all of us.”
Threats of blacklisting notwithstanding, May said they remain a ubiquitous problem.
“I see it all the time. I have seen all sorts of scams. Undercutting, offers of programs that don’t even exist. I have seen glossy brochures about CBI programs in Argentina and Croatia and agents that talk about it openly. They are not hiding. These companies must be exposed.”
Portugal changes will have negligible effect but Latvia is the world’s most underrated golden visa
As the European golden visa market awaits Portugal’s upcoming program changes with bated breath, we asked May what effects the reforms would have on the program’s competitive position in Europe, as well as on the balance of investor preferences within Portugal’s program.
“These rather minor changes won’t have much of an effect. I wouldn’t say it will have no effect 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. People are not going to invest in Spain or Italy instead.”
But how can a program not see itself become less popular if minimum investments rise?
“To most investor migrants who choose Portugal, the difference between EUR 500,000 and EUR 350,000 isn’t that significant. We are dealing with HNWIs. And don’t forget that Portugal has become a brand and we have already seen the first generation of golden visa investors who got naturalized on the back of their golden visa investments. These investor migrants are a testament to the quality of the Portuguese program.”
What about Greece, where prices will remain at EUR 250,000?
“Greece is not a good program in my opinion because it’s almost the same price as Portugal and it doesn’t really lead to citizenship unless you speak fluent Greek, live there full time, and pay high taxes. […] I don’t see any advantage to Greece over Latvia. I think the price-sensitive people who are just after a residency within the Schengen zone will go to Latvia rather than to Greece.”
We pointed out that the Latvian program, which May considers the world’s most underrated golden visa, is virtually dead, whereas the Greek program remains very much alive. May doesn’t believe that state of affairs is a reflection of the intrinsic value of the respective programs but, rather, of lopsided agent incentives.
“The Greek program is heavily marketed by real estate developers and agents who get commissions on the real estate they sell to investor migrants. In Latvia, the real estate option is much less popular and much more costly than the company investment option. [The company investment option] is not heavily marketed because there is not so much money in it for the agent. That’s why Greece is more popular.”
A dispassionate review of the facts and figures, May points out, would see Latvia come out on top in a comparison with Greece.
“If you look at it from a neutral perspective, without any sentiments, Latvia is the better deal and people will realize that over time.”
Philippe also gave a detailed answer as to how he would go about spending a million dollars on residence and citizenship by investment programs if he started out stateless.
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Christian Henrik Nesheim is the founder and editor of Investment Migration Insider, the #1 magazine – online or offline – for residency and citizenship by investment. He is an internationally recognized expert, speaker, documentary producer, and writer on the subject of investment migration, whose work is cited in the Economist, Bloomberg, Fortune, Forbes, Newsweek, and Business Insider. Norwegian by birth, Christian has spent the last 16 years in the United States, China, Spain, and Portugal.