From October 24 to 25, 2012, the China Offshore Finance (Shanghai) Summit was grandly held at the Shangri-La Hotel in Lujiazui, Pudong, Shanghai. Dr. Winner Xing, President of Worldway Group, was invited as a guest speaker at the summit, delivering an impressive speech on the topic of "Investment Immigration and Asset Allocation," and gathered with high-end professionals from the finance, business, and investment sectors to discuss related topics such as the internationalization of the Chinese Renminbi, trade investment, wealth management, investment immigration, and capital flow.
In today's rapidly developing Chinese economy, offshore finance, especially the allocation of overseas asset investments, is closely related to Chinese enterprises, individuals, and families at the center of the global economy. In his keynote speech on "Investment Immigration and Asset Allocation," Dr. Winner Xing mainly elaborated on the following points:
1. Investment Immigration and the Rapid Development of the Chinese Economy
In the past decade, China's economy has continued to grow rapidly, attracting global attention. Accompanying this phenomenon, China has experienced a third wave of immigration characterized by investment immigration, which is an inevitable social phenomenon that occurs during a country's economic development and transformation period. Research in immigration history shows that when a country's economy is at a per capita GDP of three thousand to ten thousand US dollars, an immigration wave will occur. Taiwan has also gone through a similar path in the past, but this immigration wave appeared in Taiwan a decade earlier than in mainland China. As the immigration wave in Taiwan receded, the immigration wave in mainland China began to rise. I believe that the immigration wave characterized by investment immigration in China should have at least another decade of development.
2. Cross-Border Allocation of Immigrant Assets
Investment immigration is a social behavior that aims to achieve immigration through investment, distinct from capital investment aimed at maximizing profits. Immigration investment aims to obtain immigration status. However, in recent years, there has been a blurring of the boundaries between means and ends in investment immigration: investment is made while obtaining immigration status. Here, the purpose of immigration becomes vague, while the motivation for investment becomes clear.
Regardless of the motivation for immigration, immigrant investors objectively engage in the cross-border allocation of personal assets. In the process of investment immigration, personal assets are optimized globally to some extent, partly due to the inadequacy of China's personal property system and partly due to the fact that personal assets are entirely allocated as Renminbi assets, which carries certain risks. Investment immigration is an excellent way to reallocate personal assets under the framework of foreign exchange control.
3. The Three Major Directions of Investment Immigration and Three Types of Asset Allocation
Since Canada suspended its federal and Quebec investment immigration programs, Chinese investment immigrants have increasingly flocked to three immigration destinations: the United States, Europe, and Hong Kong. First, the U.S. investment immigration program, namely the EB-5 visa, requires an investment of at least five hundred thousand US dollars in a new enterprise in a designated area, creating ten full-time jobs. This is an excellent pathway to obtain a U.S. green card, with no waiting period and an average approval time of 8 months. The role of EB-5 investment in personal asset allocation is to convert personal Renminbi assets into U.S. dollar assets through a method acceptable to the U.S. government, and to convert personal cash assets into equity assets within the United States.
The risk of asset allocation: Whether EB-5 investment can preserve value by converting equity assets back into personal U.S. dollar cash assets depends on the choice of investment projects. Worldway was the first in the industry to propose the era of selected projects for EB-5 investment in early 2009, and has won the "Best Immigration Agency Award" at the U.S. EB-5 Summit twice, being the only agency in China to receive this award.
Next, let's discuss Cyprus property immigration and asset allocation. Among EU countries, Cyprus is the only country that allows one to obtain permanent residency without the need to reside there. Cyprus property immigration has two plans: one is the permanent residency plan. By purchasing a property worth three hundred thousand euros, one can obtain permanent residency for the whole family in Cyprus within two months. As long as one visits Cyprus once every two years, their permanent residency status will not be revoked. The second is the citizenship plan. By purchasing a property worth ten million euros, one can obtain citizenship for the whole family in about six months, acquiring a passport from an EU country. The investor's Renminbi assets are converted into euro assets; the investor's cash assets are converted into permanent real estate under the EU legal system.
The advantages of asset allocation: The euro exchange rate and European real estate are at historical lows, which is extremely favorable for converting Renminbi assets into euro real estate. Additionally, Cyprus's low tax environment, with no property tax and inheritance tax, is highly attractive to investors. In January of this year, Worldway successfully introduced this property immigration project to China, making it a new hotspot for investment immigration in China in 2012.
Finally, we discuss investment residency and asset allocation in Hong Kong. The Hong Kong investment residency program, also known as the Capital Investment Entrant Scheme, requires a basic investment of ten million Hong Kong dollars in designated financial assets to obtain Hong Kong resident status for the whole family. After seven years of investment and meeting other general conditions, one can become a permanent resident of Hong Kong. The asset allocation situation: Renminbi cash assets are allocated as Hong Kong dollar non-cash financial assets, while the Hong Kong dollar is pegged to the U.S. dollar.
When considering investment residency in Hong Kong, two issues must be addressed: first, mainland Chinese individuals can only apply for the Capital Investment Entrant Scheme after obtaining foreign permanent residency; second, in a sluggish capital market, the preservation and appreciation of investment assets. Worldway Group is headquartered in Hong Kong and is the president unit of the Hong Kong Investment Immigration Association. Worldway has mature solutions for mainland Chinese investors applying for Hong Kong investment residency.
First, Worldway's Hong Kong headquarters will establish offshore companies on behalf of investors, completing the permanent residency status of the South Pacific country for the entire family within a week, thus qualifying them to apply for the Capital Investment Entrant Scheme; secondly, Worldway's Hong Kong headquarters will recommend financial products that meet the requirements of the Hong Kong Immigration Department, ensuring that investors can achieve relatively safe returns and liquidity for their Hong Kong dollar financial assets while obtaining Hong Kong residency for the whole family.
As a seasoned investment immigration professional institution, Worldway has a highly specialized team that can help immigrant investors successfully achieve the dual goals of immigration and asset optimization.
Dr. Winner Xing, President of Worldway Group, delivered a keynote speech at the 2012 China Offshore Finance Summit.
It is reported that this summit is one of the largest in its history, with over 300 industry experts in attendance. Chief Economist of Bank of Communications Lian Ping, President of China Venture Capital Association Liu Zangqin, Partner of PwC China Cao Fei, Executive Director of the Government Investment Bureau of the Emirate of Ras Al Khaimah Peter-Michael Schuster, Executive Director of Swiss ILS Trust David Ashton, and other official representatives attended the summit.
The venue was packed, and Dr. Winner Xing's speech received rounds of applause from the audience. After the speech, guests from home and abroad came to consult and communicate, engaging in in-depth discussions and exchanging business cards.
