Ireland has abruptly shut down its decade-old programme offering residency in exchange for investment from rich global — especially Chinese — citizens following criticism of such schemes from the EU and other bodies.
Ireland’s Immigrant Investor Programme, which has netted almost €1.25bn since its inception in 2012, soared in popularity last year, with the number of Chinese applicants tripling.
Chinese millionaires have used the scheme to secure a residency option, given their home country’s uncertain economic outlook. But its closure comes at a time of growing tension between the west and China over trade and security.
Simon Harris, justice minister, said on Tuesday the programme was set up during a time of unprecedented economic difficulty to boost investment for strategic and public benefit to Ireland.
But he said it had been under review for some time. State broadcaster RTÉ quoted the minister as saying he had received “strong advice” that led to his decision to close it.
“We have also taken on board a number of reports and findings from international bodies such as the EU commission, Council of Europe and OECD,” Harris said in a statement.
The EU last year called on member states to end so-called golden passport schemes amid security fears. Ireland’s programme did not provide a passport and recipients were required only to spend one day a year in the country.
No government spokesperson was immediately available for further comment.
Since the scheme began in 2012, Chinese investors, including those from Hong Kong, have accounted for more than 90 per cent of successful applicants to Ireland’s IIP programme.
Existing investments and applications that have already been submitted will not be affected, the government said.
One Chinese head of an Irish-based fund that has channelled IIP investment into the hospitality sector told the Financial Times he had been preparing for the programme being scrapped and had a pipeline of existing investment.
He said he was also speaking to Chinese investors who were still interested in investment opportunities in the tech sector in Ireland even without the IIP scheme, provided investment rules did not change further.
Moves in some US states to ban Chinese investment in property “would go too far” if replicated in Ireland, he said. But he stressed: “I have no reason to say [that will happen here] yet.”
Armand Arton, chief executive of Arton Capital, which specialises in citizenship through investment schemes, said the scheme’s closure “directly feeds into the worsening condition of east/west relations” and “legitimate concerns regarding the dramatic increase of Chinese involvement into European economies”.
“The scheme has provided a steady stream of income to Ireland . . . It remains to be seen how the resultant shortfall will be made up,” he added.
“The government will have to weigh up the cost to its economy in the difficult current climate with the perceived benefits of the scheme’s closure.”
The IIP programme was open to individuals with personal wealth of more than €2mn. The scheme allowed for investment of €1mn for a minimum of three years in an approved fund or a €2mn investment in a real estate investment trust in Ireland.
Alternatively, individuals could make a non-refundable donation of €500,000 — or €400,000 if five or more applications were submitted together — in projects in the arts, sports, health, culture or education.
That last route has benefited Gaelic sports clubs, among other projects.
Ireland has become an alluring choice in part because of problems with similar schemes elsewhere. Brexit made the UK a less attractive option even before London halted its own immigrant investor programme in February last year over security concerns. The US scheme was also on hold for months.