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Bartra Wealth Advisors have a limited number of final Irish Immigrant Investor Programme (IIP) approved investment slots available, with a restricted quota and timeframe. These slots are open to clients who have an immediate intention to apply for the IIP. Contact us now to secure your opportunity.

(Part 2) Brexit and beyond: 8 things to know about the future of the UK and Europe

In our previous article, we discussed four important things to be aware of post-Brexit. But the UK-EU deal presents opportunities, too.

From 1980 to 2020, Europe’s five largest economies have consistently been France, Germany, Italy, Spain and the UK. However, as COVID-19 has raged through Europe and the UK has departed from the European Union, many EU nations are facing deep recessions, with the economy of the EU forecast to contract by a record 7.4% in 2020.

Meanwhile, Ireland’s star has been rising. Ireland remains a strong and committed member of the EU post-Brexit. Politically, it is taking its place among the nations of the world. On a per-head basis, Ireland has a good claim to be the world’s most diplomatically powerful country. In July 2020, the 19 finance ministers of the eurozone elected Irish finance minister Paschal Donohoe to be the president of their influential Eurogroup, putting Ireland in a powerful position as the EU debates ways to deal with the economic fallout of the global pandemic. In October, the EU appointed Ireland’s Mairead McGuinness as the new commissioner in charge of financial services. Ireland also won a place on the UN Security Council, securing one of the ten rotating seats to join the five permanent members that include the US, UK, Russia, France and China.

Economically, Ireland remains a popular choice for investors looking to access the European market. With a low corporate tax rate of 12.5% (among the lowest in Europe) and favourable tax system, Ireland is a highly sought-after location for foreign investment and businesses. While the Global Financial Crisis caused a contraction in Ireland’s economy, which had been flourishing for the decade prior, it has regained its stability and for the past six years has been one of the strongest developed countries in Europe. And in terms of quality of life, Ireland ranked joint second with Switzerland, beating Sweden, Germany and the UK.

With a Brexit deal now agreed between the UK and the EU, Ireland appears to be the land of opportunity, particularly when it comes to global competitiveness. Here are four important elements to consider:

1. Business and employment

The Irish Government has continued to demonstrate its commitment to Foreign Direct Investment (FDI) by establishing a business environment that is conducive to FDI activity and Ireland remains a location of choice for many of the world’s leading companies. Indeed, more than 1,100 companies, including many of the world’s leading brands, have decided to place Ireland at the hub of their European operations. Additionally, 70 individual investments related to Brexit, with more than 5,000 associated jobs, have been approved since the UK’s EU referendum in June 2016, according to Ireland’s Foreign Investment Agency, IDA Ireland’s 2019 figures.

Dublin Docklands

Cityscape of Dublin Docklands and river Liffey with modern buildings and barge on river. To date companies that have announced investments in Ireland connected to Brexit include Barclays, Morgan Stanley, TD Securities, Wasdell, Delphi/Aptiv, Simmons & Simmons, S&P Global, Thomson Reuters, Equilend and Coinbase. And Dublin remains the most popular destination for financial services firms to relocate to post-Brexit according to EY’s Brexit Tracker.

Besides the financial sector, Ireland is home to 9 of the top 10 global pharmaceutical companies, including Pfizer, Johnson & Johnson, Roche and Novartis. It is also the base for many US Tech titans; IBM was the first US tech firm to set up in Ireland in 1956, with Google, Microsoft, Intel, Apple and Facebook moving in more recently. Last year, Apple celebrated 40 years of continued investment and reinvestment in Cork.

“For US companies with ambitions to be global players, Ireland is a natural fit for their international operations,” said Martin Shanahan, CEO of IDA Ireland. According to IDA, 245,096 people were directly employed in the multinational sector in Ireland in 2019, representing about 10% of the Irish labour force.

Although the US remains Ireland’s largest overseas investor, investments into Ireland from China have surged in recent years. According to the Rhodium Group, FDI from China into Europe declined in 2019, but the opposite was true for Ireland. Figures from Baker McKenzie show that investment from Chinese companies rose 56% in 2019 through various M&A deals and expansions, meaning the world’s second-largest economy is becoming increasingly important to Ireland. Among these, Huawei announced a €70 million ($76.7 million) investment into research and development in Ireland in 2019, while in 2020 TikTok announced its plans to build €420 million ($500 million) data centre in Ireland.

The presence of foreign/international companies helps to create strong job markets which are crucial to immigrants. With more job opportunities in professional sectors, immigrants and any graduate children do not have to sacrifice their professional career and remuneration. With an increasing number of multinational firms, this could see the country open up.

2. Favourable market environment

The EU’s Single Market environment, together with the adoption of the Euro and support from the combined power of 27 Member States, have strengthened the Irish economy and allowed it to flourish. Ireland is now a nation with a modern economy based on free trade, foreign investment and growth.

It also has one of the most favourable tax regimes in the world, attracting hundreds of foreign companies. This is strengthened by the government’s long term commitment to its 12.5% corporate tax rate.

Dublin Ireland-October 2019

Language is vital for communication. And English is now the global language of business as well as being spoken at a useful level by some 1.75 billion people worldwide – or one in four people. Multinational companies are increasingly mandating English as the common corporate language. For two decades, English has been the ‘lingua franca’ of EU institutions in Brussels, used by EU policymakers to communicate about laws regulating subjects like energy, security and trade. After Brexit, Ireland will be the only Member State where English is spoken as its first language.

Ireland may have EU membership, a favourable tax system and a global first language, but it’s keen to offer more to boost its growth and productivity. The nation is currently updating its rules around private funds to encourage more alternative investment managers to use the country as a base for their European operations. The rules have been designed to appeal to private fund managers based in the UK who will lose the “passporting” rights that have allowed them to sell investment products across the EU pre- Brexit. Ireland is already Europe’s second-largest fund centre with more than 560 international managers using the country as a domicile from where they can sell their products across Europe and Asia, and this will only increase its appeal. Managers that establish Irish investment limited partnerships will be granted more flexibility when establishing private equity, private credit, venture capital, infrastructure, renewable energy and real estate funds under legislation which was approved in December 2020 in the Dáil, the Irish parliament. The reforms are expected to create several thousand jobs and new income streams for service providers. Currently, more than 16,000 staff are directly employed in Ireland’s fund industry including portfolio managers, administrators, trustees, auditors, compliance, legal and tax advisers.

3. Freedom of movement – UK and EU

Ireland remains a vital member of the EU and continues to benefit from the union’s economic and political stability. As EU citizens, Irish nationals can continue to live and work freely in any EU Member State and Irish citizens continue to enjoy other privileges, such as access to the European Health Insurance Card that provides them with healthcare while traveling throughout the EU. Students belonging to Irish institutions have access to the Erasmus+ programme and the right to study in the EU. Other perks for Irish nationals include waived mobile phone roaming charges when traveling within the EU.

Ireland will be the only bridgehead into both the EU and the UK following Brexit. The Common Travel Area (CTA) is a long-standing arrangement between the UK, the British Crown Dependencies (Jersey, Guernsey and the Isle of Man) and Ireland that pre-dates both British and Irish membership of the EU and is not dependent on it. Under the CTA, British and Irish citizens can move freely and reside in either jurisdiction and enjoy associated rights and privileges, including the right to work, study and vote in certain elections, as well as to access social welfare benefits and health services.

Thanks to its strategic relationships with the EU and the UK, and the freedom of movement that these provide, many international companies see Ireland as an important gateway to both the UK and Europe.

4. The popularity of Irish residency and citizenship

As Brexit sees the UK and EU go their separate ways, EU nationals residing in the UK must now apply for settlement, while UK citizens residing in the EU must follow suit and obtain resident permits. But there’s an exception – the Irish. And for this reason, Irish residency and citizenship are becoming increasingly attractive.

Flags of Ireland and United Kingdom with a EU flag

In particular, the Irish Investment Migration Programme is gaining popularity among wealthy individuals, not just because of its links to the EU and UK, but also due to its safety and simplicity. Compared to other Golden Visa programmes in Europe, the Irish Investor Immigrant Programme (IIP) outshines its peers. When investing in enterprises under the IIP’s investment options, the required holding period of 3 years is low compared to other European investment migration options (Greece, for example, requires an indefinite holding period), while the exit strategy is simple and straightforward without the need to liquidate investments; you simply get your money back. The IIP also only requires investment after approval, and unlike in other countries where the investment is required in real estate, investments in the IIP are hassle-free when it comes to exiting with no need for property management firms to rent out properties for ROI, nor the need for brokers to find buyers once the holding period is over. IIP makes the Irish immigration process simple, clean and efficient. To find out more, read about the Irish Investment Migration Programme on IMI.

Obtaining Irish residency in the most durable bridge between two of the strongest economies in the world, the EU and the UK, following Brexit, and is undoubtedly a wise move for international investors. This is something which the IIP sets the stage for in 2021. And we believe that interest in the IIP will only increase as businesses and affluent individuals recognise the personal and professional advantages of maintaining a foothold in Europe, and foresee strong demand from China, Hong Kong, Vietnam, India and the UAE, as well as interest from South Africa, Canada and the UK.

To find out more about our IIP, please do not hesitate to get in touch. Missed Brexit and beyond Part 1? Click here to read.

 

(Part 1) Brexit and beyond: 8 things to know about the future of the UK and Europe

The UK and the European Union (EU) finally agreed a deal on Christmas Eve that will define their future relationship. It replaces the partnership they have shared for the last 47 years. But will this take Brexit off the front pages or stop Brits talking about it? Or has the real Brexit battle only just begun? We have put together a summary of Brexit-related information to help you gain a better understanding of what the future holds for the UK and Europe.

What do we know about the deal?

The 1,246-page trade agreement has detailed provisions on many issues and contains new rules for how the UK and EU will live, work and trade together. Importantly, it means no tariffs or quotas will be introduced. However, while the deal came into force on 1 January, with everything left so late many people and businesses have not had much time to prepare for the changes.

There are four key things to be aware of:

1. Economy

The British government’s own fiscal watchdog, the Office for Budget Responsibility (OBR), has said that the deal will dampen long-term GDP by 4%, meaning Brexit is projected to do more economic damage to Britain than COVID-19. The deal is also seen as a ‘thin’ deal, which means it leaves many unresolved issues to be dealt with in later negotiations.

Yes, the UK has avoided tariffs on trade, but there will now be other complexities and mountains of paperwork. The UK benefited from access to more than 20 EU systems, which do everything from track the movements of goods and vehicles to store risk profiles for goods and producers from around the world, with the UK sharing its own data as part of this. But after Brexit, although tariffs for goods will be dropped, more friction may ensue as a result of other trade barriers, such as the administrative burden on traders, complicated border processes, and limited information sharing between customs authorities. Additionally, the new import and export declarations alone are likely to cost UK companies £7.5 billion ($10.3 billion) annually, according to HM Revenue & Customs.

Unemployment will also be a challenge post-Brexit. Since the June 2016 referendum, the job market has been contracting, with many companies leaving the UK, downsizing or cutting jobs. For example, in the financial services sector, Aviva, Britain’s second-largest insurer, stated that it would move £7.8 billion worth of assets to Ireland, while Bank of America Merrill Lynch (BAML) announced a merger between its UK and Irish subsidiaries, transferring 125 jobs to Dublin, which remains BAML’s European headquarters. Additionally, British bank Barclays is transferring £166bn of its clients’ assets to the Irish capital, while Credit Suisse plans to move about 250 bankers from London to other European financial hubs. According to EY, £1.2 trillion ($1.6 trillion) of assets, along with around 7,500 employees, have been transferred out of the UK to the EU, including to Dublin, Luxembourg, Frankfurt and Paris by financial services firms.

Job UK

UK unemployment is forecast to reach 2.6 million by mid-2021, according to the government’s economic watchdog, which represents 7.5% of the working-age population. This will compound the impact of the COVID-19 pandemic, which has resulted in nearly 300,000 jobs lost in the hospitality sector since February 2020. In addition, retail has shed 160,000 jobs as non-essential shops have been forced to shut, and culture has seen 89,000 jobs go. And those figures are only for staff on company payrolls; thousands more casual workers and freelancers have been affected too. It seems unlikely that the UK’s economy will rebound quickly.

2. End of free movement

UK citizens and residents will no longer have the right to work, live, study or start a business in the EU without a visa, though short stays will be allowed (visa waivers will apply). This doesn’t help those seeking to travel frequently and do business in the EU. Comparing market capacity, the UK’s population is about 66.4 million, but the European Union’s, excluding the UK, is six times larger, which may lead to unfavourable business opportunities.

COVID-19 has also movement less free. The UK is Europe’s worst-hit country, with more than 40 countries banning UK arrivals in December 2020. There were hundreds of passengers at London’s Heathrow Airport scrambling onto the last flight to Dublin minutes before a travel ban set in at midnight on 20 December to nations across Europe. Tighter measures may apply with prolonged quarantine and pre-departure PCR tests likely required even when the situation begins to ease.

3. Education

Students and young people from Britain will no longer be able to take part in the Europe-wide Erasmus exchange programme. Since 1987, the Erasmus programme has provided opportunities for students to go on exchange abroad, linked schools across the EU and offered work experience and apprenticeships in European countries. Around 200,000 people, including 15,000 British university students, have participated in the programme in its latest incarnation.

Vivienne Stern, the Director of Universities UK International, told The Guardian, “As I understand it, there will be grants for young people not just in universities but broader than that, to support study and possibly working and volunteering. These experiences help graduates gain employment, especially for students from low-income backgrounds who are the least likely to be able to travel abroad otherwise.” She added that any Erasmus replacement needed to be “ambitious and fully funded”, and that it “must also deliver significant opportunities for future students to go global, which the Erasmus programme has provided to date.”

4. Financial services competitiveness

No deal has been agreed for financial services, which will be worrying for many would-be emigrants holding professional qualifications, particularly as these qualifications will no longer be mutually recognised between the UK and EU and professional persons will have to be separately registered in each.

The EU and UK have not yet struck a deal that will provide UK banks and asset managers with access to European markets. EU regulators are unlikely to allow London to keep the benefits of the single market without its obligations, and EU banks will have to cease from using platforms in the UK for swaps, certain derivatives and Euro-denominated stocks from January. UK financial services firms will lose their passporting rights, which in the past allowed them to sell funds, debt, advice, or insurance into the EU from their UK base without the need for additional regulatory clearances.

Investment-stock-marke

Worse, it means that UK firms have to agree and comply with the individual rules of each of the EU 27 Member States if they wish to sell financial services there. The implications for a loss of financial services activity from the UK to the EU are significant.

Due to Brexit, almost 30 financial groups have moved operations from London to Dublin. “We’re now seeing those financial services firms who have relocated, gained their licensing and are operationally ready, focus a lot more on ‘business as usual’,” said Cormac Kelly, financial services Brexit lead for EY Ireland in an interview with the Irish Times.

The post-Brexit trade agreement leaves many questions unanswered, but while there is uncertainty, there is likely also opportunity. Stay tuned for Part 2 of our Brexit and beyond article, where we look at what else lies ahead for the UK and the EU.

Many of our clients are looking for an alternative to UK immigration after Brexit, while we are also receiving enquiries from the UK for Ireland immigration advice. Read our article on UK immigration post-Brexit to find out more.

The safest investment – Hong Kong iBond 2020 vs The Immigrant Investor Programme

The announcement of the latest iBond, which is the seventh series issued since 2011, is open for subscription at 9 am on October 23, 2020. The three-year-long, HK$10 billion worth bonds promises to provide a steady source of income for everyday investors, but there are always alternatives among the safe investments. We know an investment option that offers not only an almost guaranteed rate of return but also a world-class permanent residency.

What are we talking about?

In short, the iBond is an inflation-linked retail bond released by the HKSAR Government under the retail bond issuance programme of the Government Bond Programme. Offered at a minimum denomination of HK$10,000, the HKSAR Government will repay 100% of the principal amount at maturity, along with generating half-yearly interest payments which are based on the Composite Consumer Price Index. The guaranteed minimum payment is at 2%.

If you are investing based on the appeal of a safe and regular return, investing in iBond is sensible. However, if you are aiming for more, the Immigrant Investor Programme (IIP) can be a promising alternative.

The Immigrant Investor Programme (IIP) offers the applicant a secure residency status in Ireland through an approved investment. Depending on the choice of project, whereby we offer government-backed Nursing Home and Social Housing projects under the Enterprise Investment route, the applicant will receive their full investment of €1 million and 4% interest per year if they were to choose to invest in our Nursing Home projects. This means, at the maturity of the five-year investment period, the applicant will get an extra €200,000 tax-free, on top of their €1 million investment, as well as a STAMP 4 identity in Ireland.

Nursing Home and Social Housing

How do you invest in them?

The iBond subscription period will start from 9 am October 23 to 2 pm, November 5. Applications can be done via placing banks, securities brokers, or the Hong Kong Securities Clearing Company Limited. If the total application amount is under HK$15 billion, all eligible applicants will be satisfied. However, if the total application amount is over HK$15 billion, the iBond will be allotted by lottery, where each chosen applicant only gets one hand of bonds. The iBond will then be issued on November 16 and be listed on the Stock Exchange of Hong Kong on November 17. The trading of it in secondary markets can happen after.

On the other hand, the IIP is open for application at any time of the year and the process is very simple.

There are just four key steps to the IIP process:

  • Application
  • Approval
  • Investment
  • Receive residency

What is particularly attractive about this programme is that the investment is placed after receiving the approval letter. Not to mention, both of the assets of Social Housing and Nursing Home projects derive their income directly from the Irish State, making it a very safe investment for our investors.

Why should you care?

Both the iBond and the IIP are stable investments that offer promising investment returns. But as the intention to immigrate has spiked in recent years, being able to obtain a residency on top of an investment can be very appealing.

Dublin

Ireland is an emerging emigrant destination for Hong Kong people. As the only English-speaking member of the European Union, Ireland is a gateway to both the UK and European countries, offering a great education system and enjoys one of the lowest corporate tax rates in Europe, increasing its appeal as a regional business hub for multinational corporations.

The time for getting approval for the IIP is only 4-6 months. There are no language requirements and the residency requirement is just one day per year, meaning that the applicant can obtain residency without moving. 

The choice is yours

iBongHK and IIP Eng_Text enlarged

Of course, you should assess all the aspects of every investment you make, and there will definitely be variables that may change your mind. For example, the biggest barrier to the IIP is that the applicant is required to have €2 million net wealth. While we are able to offer investors a 4% annual investment return on their €1 million investment for 5 years, the iBond has historically exceeded the 2% minimum return, where their highest interest rate offered was 6.08% in 2011.

This is why we’re here. To find out more about IIP, how it works, what the benefits are, and how you can apply, speak with one of our expert advisors! Or simply complete the form below to download your IIP brochure.