More Wealthy Chinese Said to Prepare Exits

Some immigration lawyers have seen a new increase in the number of Chinese seeking foreign citizenship, a trend they suggest is tied to worries about political unrest and economic slowdown in China, especially among businesspeople and politicians seeking to protect their families and wealth.

The recent interest builds on a trend of growth in applications from Chinese seeking to emigrate to places like the U.S., Canada and the U.K. in recent years, including to programs that promise citizenship in exchange for investments: In the U.S., 75% of investor-immigrant applicants were from China in fiscal 2011.

The rush to apply to the U.S. investor immigration program, known as the EB5 visa, is also partly caused by Washington politics: The plan has to be reauthorized by Congress in September for it to continue, but applications filed before that date will still be considered.

Under the program, applicants and their immediate families receive permanent U.S. residency if an investment of at least $1 million in the U.S. leads to 10 full-time jobs within two years. The requirement is only $500,000 if the U.S. jobs created are in a rural or high-unemployment area.

There is little information on the identities and actual numbers of Chinese seeking to leave, but in the weeks since the Communist Party’s firing of senior party official Bo Xilai, there is a general feeling of uncertainty ahead of a once-a-decade leadership transition in the fall.

Mr. Harvey and other lawyers say clients rarely give a reason for wanting to leave, which makes it difficult to say whether the latest headlines are helping to drive the push, though they say anecdotal evidence suggests they are a factor.  Mr. Harvey said that as recently as this week he received queries from Chinese consultants about programs under which Chinese clients could secure passports in a short time.

Canada was a favorite destination, but its investor immigration program, which required applicants to essentially post an 800,000 Canadian dollar (US$799,500) five-year, interest-free loan for governments in the country’s provinces, is no longer accepting new applicants.  That has led wealthy Chinese to look to the U.S. and elsewhere.  Mr. Harvey said he filed 16 applications to St. Kitts from Chinese citizens in the past two weeks. In the past, he has typically filed only one to two a month. “We now have people looking for short-term products,” he said.

Bulgaria’s investor program requires immigrant applicants to place 1 million Bulgarian levs (US$676,000) into a government bond portfolio for five years. That qualifies for a permanent residency immediately and for a passport in five years. Similar to St. Kitts, there is no residency requirement and applicants can be admitted in six months, according to immigration lawyers and consultants.

Experts say the flow of China’s rich to the U.S. will likely also increase dramatically this year. Already, the U.S. took in 2,969 applications (each of which can cover several family members) from China for investor immigration in the fiscal year ending in September, compared with just 787 two years earlier, according to the U.S. immigration agency.