For differing reasons, the UK and Portugal are among Europe’s brightest immigration lights.
For whatever reasons, enquiries about relocating overseas by Hongkongers have spiked in recent months. Those reasons could include everything from the current, raucous political environment to the physical environment to economics. Australia and Canada seem to be pulling ahead as far as the early investigation goes, but both locations have obvious appeal — as well as significant drawbacks. There are ins and outs when it comes to immigration and emigration, so where does property fit into it all?
For better or worse, historical connection plays a substantial role in where one might decide to resettle. France is obviously popular for Algerians and Haitians, South Americans (Brazil excepted) frequently head to Spain. Hong Kong has deep ties to the United Kingdom, and as such the country is a perpetual emigration destination. According to data from the UK’s Home Office, in the previous 12 months ending in September 2019, applications for citizenship from non-EU nationals rose 17% after falling the two consecutive years before. Additionally, there were over 91,000 decisions on applications for settlement, generally the step that precedes citizenship. Many of those were likely Hongkongers (tables detailing applications were unavailable).
While the UK lacks a traditional golden visa scheme, it does welcome investment, though at a more substantial level than simply a €250,000 (just over HK$2 million) flat. Initially in anticipation, and now in the wake of Brexit (and a year-long transition) investors have been split down the middle: some have taken a cautious, wait-and-see approach since the referendum, others have seen falling prices as an opportunity. By the same token, many took the vote as a “Stay Out” sign aimed at non-Brits. Either way, the UK is entering a year of uncertainty.
The re-election of Prime Minister Boris Johnson’s Conservative party signalled stability that was instantly reflected in market confidence. Anecdotal evidence suggests builders, developers, agents and industry professionals have all seen an uptick in sentiment; Fitzsimmons’ Experience Invest noted a 30% spike in enquiries. Whether that continues into immigration numbers — which were already trending up — remains to be seen, but the UK falling off investor and emigrant radar seems like a long shot. The pound is predicted to rebound in a few years, and once post-Brexit deals are final, the UK will once again appear as the safe haven it always has been.
“The UK post-Brexit will find itself more alluring to inward immigration internationally as it seeks to negotiate a new tariff with Europe and globally with new trading partners in Southeast Asia, which it was never allowed to do pre-Brexit,” finishes Fitzsimmons. “The UK is open for all to migrate to and trade with.”
To the continent
Like the UK, Portugal has a regional connection (technically to Macau), and the country’s wobbly economic outlook a few years ago (Portugal got caught up in the Eurozone crisis of the last decade) compelled the government to find a rash of solutions to its fiscal woes. Greece, Ireland and Spain all kicked off so-called golden visa programmes, investment schemes that offered residency perks — the idea being they led to citizenship in an EU country — and Portugal joined in. As the others recover economically and scale back, Portugal is sticking with the visa-led investment.
“Portugal offers one of the best Golden Visa programmes out there, with access via a real estate investment usually of €500,000 (approximately HK$4.2 million),” says Fine and Country’s Bruce Hawker. “This gives the buyer free movement in Schengen countries and the right to a passport after five years.” The programme has generated €5 billion (HK$42 billion) in foreign investment since 2012.
Luke Fitzsimmons, director of online marketing for London’s Experience Invest agrees there’s been both apprehension and opportunism, particularly in relation to currency (the sterling has lost up to 15% since the referendum) and developers incentivising purchases. “This has given overseas investors the ability to acquire property in the UK, which they have always viewed as a safe and stable market, at a discounted rate,” begins Fitzsimmons, also stressing that the exclusionist perception of Brexit is inaccurate. The UK, as Fitzsimmons sees it, will always welcome foreign investors and immigration, and “Prides itself on being a Free Trading nation … Its Brexit stance was always designed to promote global trade with all countries and not restricted to favourable tariffs within Europe alone.”
That may be easier said than done now, however. The bulk of Portugal’s golden visa investment has been into Lisbon, and that, along with Porto and Algarve, is about to end. The new legislation will limit investment to the country’s interior regions, Madeira and the Azores, with effect from 2021. On top of that, it’s in the EU but English isn’t the official language for Hongkongers considering work or education, and recent news in the SCMP suggested the bureaucracy and paperwork made navigating the programme a minefield. Combine that with the Portuguese government and EU opposition to the programme altogether and time could be running out for keen investors.
Brexit has become something of an opportunity for other parts of Europe that are willing to fill the gap and provide investors with EU connection — often at a fraction of the price. Portugal, as well as Spain and France, are benefitting from an increase in UK buyers amid Brexit madness too, but as Hawker notes, “Portugal is still very attractive to Hong Kong ex-pats, and it always has been.” Those put off by the potential complexity of a golden visa programme can take comfort in the country’s non-habitual residence (NHR) scheme and its 10-year tax break for those who qualify.