Report: IM Yearbook 2019/2020
Media: Investment Migration Yearbook 2019/2020
Sector: Investment Migration
Publication Date: June 2019
Larry Wang, President of Well Trend United
Inside China’s Migration Industry:
TOO BIG TO BE IGNORED
Chinese nationals are among the top applicants for residence programmes across the world; yet, they are encountering more barriers than ever to realising their emigration plans. Larry Wang, President of Well Trend, talks about the deregulation of immigration consultants in China, the EB-5 backlog, and what Chinese clients really want.
How would you describe the current immigration market in China?
The good news is that demand is still very strong, despite the fact that the Chinese economy is slowing down. December 2018 marked the 40th anniversary of China’s reform and opening-up policy, and the appetite to go abroad by those that got rich during the past decades continues unabated. The bad news is that the government has deregulated the market. From February 10th 2019, immigration consultants operating in China are no longer required to have a licence. My firm Well Trend has been around for 24 years, and we are now witnessing a massive influx of new start-ups.
Why did China decide to drop the regulation at a time when most countries are moving towards regulating agents and service providers; and what effect will this have on the industry?
I would really like to know the answer to that, but I can only guess that the Chinese Government wants to be seen as open. As I mentioned, we have seen a lot of new firms coming into this market. In one Chinese province we have seen almost 6,000 new immigration consultants starting to operate, and we estimate that in the whole of China close to 20,000 new immigration consultants entered the industry since the deregulation. Among them are wealth managers, real estate companies, and even travel agents who feel they have clients interested in migration products but don’t necessarily have the required knowledge and experience in this industry. I am pretty certain that a good number of these firms, probably around 35% of the new entrants, will be gone in a few months, and the market will ultimately decide which firms are capable and therefore will survive. However, in the short term this means that clients need to choose carefully which immigration consultant they work with.
How is the Chinese Government looking at the industry at the moment? There seems to have been a drive to get Chinese to invest at home rather than abroad.
China is still encouraging people to go abroad, but the biggest challenge these people are currently facing are currency controls. It is not easy for Chinese high-net-worth individuals to trans-fer money abroad. Every Chinese individual is only allowed to transfer up to $50,000 per year out of China. Obviously, that is not enough for immigration purposes. Looking at the EB-5 Programme, they need to make an investment of $500,000. That means applicants would need to find 10 people who would pool in their annual quotas for moving money overseas, or use their international network to source the funds.
What countries and programmes are high on the agenda of Chinese high-net-worth individuals?
For 80% of our clients the two main drivers are securing visa-free travel for business and leisure, and better education for their children, whereby many families are seeking ‘native English education’. This also explains why the US and Canada are still the top two destinations for Chinese nationals. The issue with many other programmes, especially the European ones, is that they don’t provide English-speaking educational opportunities, and hence they are not as attractive. The fact that education is the main driver also means that the main applicants don’t necessarily want to go abroad themselves.
What advice do you give them in relation to EB-5 given the long waiting time?
In my opinion the EB-5 programme is not the best solution for many of our clients. As I mentioned, most Chinese just want to send their children to the US to study. Many of my clients are well established and successful entrepreneurs who want to stay in China, and they also want their children to come back to China after completing their studies. We are also pointing out to our clients that once they have obtained their visa as part of EB-5, they have to live in the US, otherwise they might lose their status if they don’t apply for a leave of absence. So I think the EB-5 programme is not the ultimate solution, and depending on the circumstances, it makes more sense to apply for a student visa for their children.
How attractive are programmes in Europe to your clients?
It is increasingly becoming more difficult to enter the US and Canada, so our clients have no choice other than to consider other countries. Europe is becoming more and more popular in the Chinese market. The Greek programme is very price-competitive, and saw a lot of traction last year. However, I think a lot of agents have over-promoted the programme, and this year we will not see the same momentum as last year. The numbers will be lower. However, the investment of €250,000 is very attractive to the majority of people in China. In Beijing, real estate prices are excessively high, and for the price you need to pay for an entire house in Greece you would only be able to purchase a kitchen in Beijing. I also see Portugal, even though the investment requirement is double at €500,000, as an attractive market. Several years ago, there were some problems with the programme, but I hope to see the return of the Chinese in Portugal in 2019, especially with the US becoming more and more difficult. Given that it is English-speaking, Ireland is also becoming an attractive option. In my opinion, Malta and Cyprus need to stabilise their programmes, also vis-àvis the European Union, in order for them to become more attractive. In Malta, the process is also very slow, and we have some clients who have been waiting for almost a year, which is very frustrating for them.
What’s the acceptable timeframe for Chinese clients?
That’s an interesting question, as most clients want to get their visa as soon as possible, even though they don’t want to go immediately. Once they have their visa, they often ask me when they have to be there at the latest for it not to expire. This is an issue of trust, and therefore, they want to hold the visa in their own hands as quickly as possible. I would say that three to four months is an acceptable processing time.
Many programmes are coming up with different investment options. What is the preferred investment route of the Chinese?
Well, I always advise clients that they first need to focus on the immigration aspect, and not on the return on their investment. While it is not impossible to achieve both, I always tell them to prioritise immigration. Overall, I am not a big fan of the equity option and programmes that require applicants to become a shareholder of a company. This route is too complicated for them. I think a loan option is a better way; it is much more straightforward and it is also a safer investment. In terms of real estate, I am not saying the opportunity in some countries is not good, but our time and energy is limited, and we need to focus on what makes most sense to our clients.
What recommendation would you make to programme operators and agents seeking to market their programmes in China?
I would advise them to focus a bit more on the needs of the clients rather than their own. China is a very important market that should not be ignored. Due to the EB-5 backlog, some agents switched their attention to other markets, such as India and Vietnam, but even taken together, these markets are not as large as the Chinese market. I also feel that Chinese immigrants should be welcome wherever they go; they are very diligent, loyal and hard-working people. And I am pretty certain that the Chinese market is a lasting one that will be around for many years to come, although it is a bit difficult to ascertain which programmes will be popular in China over the coming five years.
”December 2018 marked the 40th anniversary of China’s reform and opening-up policy, and the appetite to go abroad by those that got rich during the past decades continues unabated.”
BIO: Larry founded well Trend in 1994 starting with just two employees. now well Trend has over 400 employees and offices all over China, as well as in Vancouver and Budapest. Wang is regarded as an immigration pioneer in China since well Trend was one of the first to introduce Canadian, American, and European programmes. Wang is highly sought after for his views on immigration, having been interviewed by all major international and Chinese media outlets. he is regularly invited to speak at immigration conferences in north America, Asia and Europe.