I spent the better part of my day today at a small conference attended by many of Shanghai’s wealthy, plus their lawyers and accountants. Considering the subject material is highly frowned upon by the government, I was surprised that so many were in attendance.
So what was the topic of discussion at today’s event? Second citizenship. Specifically, the St. Kitts second citizenship program.
Throughout the afternoon, local Chinese listened intently as speaker after speaker extolled the virtues of St. Kitts and its economic citizenship program.
In case you haven’t heard of the program, it’s one of the oldest economic citizenship models still in existence. An interested applicant must invest $350,000 (plus government and legal fees) in a government-approved real estate project, as well as undergo a background and medical examination.
If accepted, the applicant will be awarded with citizenship of the Federation of St. Kitts and Nevis. Since the island-nation is a Commonwealth country as a former British colony, St. Kitts citizens enjoy visa-free travel to the UK and European Union.
There were several developers at today’s conference with lots and homes for sale. From what I could tell, the average price point was around $700,000. The locals stared eagerly at the sales brochures, full of Caribbean Sea views and vibrant green tropics, which made for a stark contrast against today’s gray skies in Shanghai.
The St. Kittsians in attendance today were in demand because they can solve multiple problems for wealthy Chinese.
First, wealthy Chinese want to be able to travel internationally with ease, and this is something that is simply not possible with a Chinese passport– there are far too many visa requirements, and staying somewhere for more than a couple of weeks is problematic. The St. Kitts economic citizenship program would provide an excellent passport for them and their family members.
Second, purchasing foreign property is an effective way to get money out of China because it cannot be forcibly repatriated. Chinese are normally subject to extreme exchange controls with transfer limits of about $50,000, and moving money requires a litany of stamps and approvals.
Property purchases are slightly less cumbersome, and most buyers are able to more easily execute this by first sending the money to an account in Hong Kong, which has no exchange controls at all.
Third, and most importantly, Chinese want to be able to establish residency somewhere else, preferably in a place where they can send their children to school. For Chinese families, this is the ultimate priority– to have a western educated child and a place for the family to live outside of China. They start planning these things from the day the child is born.
Overall, I am convinced that today’s event is indicative of an enormous trend. Chinese clearly want additional travel freedoms and the ability to reside, even if temporarily, overseas. They have the money to pay for it.
Ironically, Chinese are not able to find the answers themselves… many websites that discuss second citizenship programs are blocked, so they need these live meetings to get a better understanding of the opportunity.
Meanwhile, foreign developers and lawyers really want access to the Chinese market. Their traditional markets from the past several years– wealthy North Americans and Europeans– have dried up. China represents the next growth market of people who have both the necessary appetite and available capital to acquire foreign property and/or second citizenship.
In my opinion, there is a fortune to be made for an entrepreneur who can match the buyers and sellers together. I think this is a very real opportunity, and I’d like to hear what you think… especially if someone is interested.