The Irish Immigrant Investor Programme (IIP) is gaining in popularity among affluent families looking for alternative residency in an English-speaking country where they can enjoy better education and quality of life. In addition, there are a number of other benefits that the IIP offers.
The IIP used to be undervalued, but that is no longer the case today, particularly post-Brexit and following the UK’s shut down of its investor visa route. As of September 2022, more than 1,600 IIP applications have been approved for investment with a value of over €1 billion, and last year alone there were around 900 applications, an all-time high in the IIP’s history. For those who are not familiar with the IIP, read our previous blog highlighting the 4 things to know about the Ireland IIP, or watch our explainer video. Here, we will focus on one of the IIP’s key features – investing only after approval is received, and what that actually means to an investor.
Safety and liquidity planning
Most Residency By Investment (RBI) programmes and Citizenship By Investment (CBI) programmes require the applicant to invest first.
To qualify for Australia’s Investor Stream Visa, for example, you will need to commit at least AU$2,500,000, with your investment allocated according to set criteria, and processing your application can take more than 20 months. Under the US’s Immigrant Investor Program or EB-5, applicants are required to invest a minimum of US$1,050,000 for standard investments or US$800,000 for investment in a commercial enterprise principally doing business in a targeted employment area or in a regional centre-associated infrastructure project. EB-5 processing can take 2 to 3 years for the Standard I-526 petition to be adjudicated, and the investor’s capital must be placed “at-risk’” until the end of conditional permanent residency with a chance for gain and a risk of loss — without any guarantees of return of capital.
Ireland’s IIP is a rare RBI programme in that the applicant’s investment is not required to be made until the application has been approved. After applying for the IIP, processing is straightforward and approval usually takes between 6 to 8 months. Whether you are choosing the €400,000 Endowment option or the €1 million Enterprise Investment option, applicants who are successful will be issued with a pre-approval letter from the Irish Naturalisation and Immigration Services (INIS) inviting them to make their investments, which must be made within 90 days of receiving the letter. Once an applicant fulfills the investment requirements, they and their qualifying family members will be granted residence permission in Ireland under Stamp 4 conditions, which is equivalent to a Permanent Residence status.
Under the IIP, investors do not need to liquidate their assets upon application. They have about 6-8 months to cash out their investments, or to pledge their assets to secure loans at a suitable interest rate so they do not have to sell off their portfolio. Compared to other RBI programmes, the IIP offers greater flexibility for investors to plan their finances, with better clarity investing in IIP-qualified projects once approvals are received. Additionally, capital is protected when investing in the IIP Enterprise option.
Asset diversification
Ireland continues to rank highly as a strategic location for investors seeking to secure long-term income generated by real estate investment and funding according to EY Ireland. Factors include its growing popularity, attractive employment demographics, high levels of FDI, favourable supply and demand dynamics, robust legal system, improving infrastructure system and strong performance of certain real estate asset classes.
Investing in the IIP’s much-needed social infrastructure projects, such as social housing and nursing homes, is very safe. Demand is strong as more people require housing due to a growing and rapidly aging population, with the latter requiring more homes and facilities to provide long-term specialised elderly care. Many institutional investors, including private equity-owned companies, are in favour of adding these assets to their portfolios to meet long-term investment objectives, especially if they can achieve economies of scale. For example, Bartra Healthcare successfully sold three nursing homes and one transitional care unit as a portfolio to Belgian REIT Aedifica in 2022, for about €161 million.
For IIP investors, investing in Bartra’s nursing home projects offers 4% annual interest throughout the five-year investment period, which is €200,000 at maturity on top of the investment principal. Investing in the IIP is also a Euro-based investment, which offers currency diversification for investors.
Click here to learn more about the IIP.