Martin O’Connor, CEO of Kylin Prime Group

We Need to Enter an Era of “Coopetition”

Successful industries thrive on having the culture and ability to compete vigorously but at the same time collaborate strategically – ‘coopetition’, and the investment migration sector is no exception, says Martin O’Connor, CEO of Kylin Prime Group. He calls for an enhanced dialogue between international institutions, countries and companies for the greater benefit of the market and society.

Kylin Prime has an unusual operating model compared to many in the industry. Can you tell us a bit more about it?

We have adopted a very specific model and created what we call an entire ‘ecosystem’, which means we can offer our clients holistic packages provided by different companies within the group. Kylin Prime Group is our master brand, and within that group for example, we have Kylin Prime Funds, Kylin Prime Capital, Kylin Prime Family Office and Trusts and Corporate Services; while Ousheng & Partners focuses on global mobility and RCBI programmes. These companies all work closely together focused on investment security and return on investment; ensuring that transparent investment vehicles are being used.

The investment migration industry is currently under extreme pressure, with potential tax evasion, security threats and money laundering often being cited by the industry’s critics. We have set up highly regulated investment funds in key markets that our clients like to invest in, such as Ireland, the UK, Malta, Cyprus and Portugal. This means our clients are subject to financial regulation and have gone through the most stringent due diligence and KYC processes. We are also the majority shareholder of a European banking institution, which gives us the additional opportunity to offer private banking and wealth management services to our clients. Apart from that, we have established a think tank, the Future Citizen Institute, which produces research and analysis related to investment migration. We would like to see the institute evolve into a strong knowledge partner for all stakeholders in the investment migration industry.

I believe in an environment that allows firms to compete but also to collaborate where necessary, for instance on issues that are important to help develop the industry further. We need to come together and support the main industry organisations so that we speak with one voice.

How would you describe the state of the investment migration industry at the moment?

The industry is at a pivotal moment in its young history. The sector has matured and professionalised quite a bit during the past three years, yet the case for collaboration is stronger than ever given the increased scrutiny from international institutions such as the EU and the OECD, policymakers and the general public. The industry is now entering the shakeout period. Consolidation will be inevitable as the industry moves towards increased levels of regulation, be it in the form of government regulation or self-regulation. The key players in the marketplace are clearly sup-porting this direction, but this will create an environment in which smaller firms might struggle to survive.

What are the top three challenges that the industry is facing?

The main challenges relate to industry reputation and trust. Many people dislike the concept of in-vestment migration from an emotional mindset. The post-Brexit Irish passport boom is a good example of this issue. Recently, Ireland has received some 200,000 citizenship applications from UK nationals of Irish heritage, and in fact there are around 6.7 million people in the UK who are eligible for Irish citizenship. I think it is fair to say that the majority of these people don’t have a real interest in Ireland. They will most likely not visit Ireland and neither will they invest in the country. However, the public at large has no problem with the fact that record numbers of Britons are now seeking Irish passports. On the other hand, when migration of high-net-worth individuals is talked about, the narrative is rarely positive, despite these people contributing enormously to the economy. This brings me to the third challenge: We have to get to the stage where the EU has a realistic view of the industry. The recent reports from the European Commission and the European Parliament both reflect a lack of understanding of how the investment migration industry operates and what economic benefits and value it brings to countries. The EU has to be open to hear the positive side of the industry.

What do you think programme regulators and the industry need to do to restore public trust and set the record straight?

We cannot deny that there have been instances of bad practice, and it is our responsibility to clean up the industry. We need to make sure that all players adhere to ethical standards and professional behaviour at all times. Organisations that do not follow these rules should be ostracised. We, as the industry, also need to learn to work together effectively and prioritise long-term benefits over short-term gains. After all, it is our reputation that needs to be safeguarded, and I am pretty sure that companies that will continue to prioritise short-term gains over long-term benefits will fall by the wayside.

So is the answer to the current situation to encourage the EU to take a more central role and oversee the industry, similar to the EU’s supervision of the banking sector?

The EU is very clear in saying that the granting of citizenship and residence are national rights, and I don’t think the EU is interested in supervising the sector directly. At the moment, we are seeing that sensationalist rhetoric is shaping the debate. Investment migration is a multi-billion euro industry. It involves investment that can bring huge benefits to society and economies and also involves people’s rights. Security issues, financial crime and tax evasion seem to be areas of concern for the EU. Our industry has to be responsible in these areas but the EU, as well as the OECD, also need to be responsible in their pronouncements and intentions and not stymie something that can be so beneficial all around. It works both ways.

What are the big trends in the industry that you are noticing at the moment?

From the clients’ side, we are seeing a growing need for an all-encompassing investment and RCBI journey. For many ultra-high-net-worth and high-net-worth individuals, diversification of assets is the top priority, and they are interested in more than just getting a visa. The other trend is that we are seeing more programmes being introduced, and I expect this number will only increase in the coming years, as more governments recognise the benefits that countries with programmes reap.

What’s your future outlook for the next five to ten years?

If we can overcome the current issues and build a sustainable investment migration industry, the industry can become hugely beneficial, not just commercially to the companies involved in this sector but also for global society. I am convinced that the sector can be a catalyst for global growth and an evolution towards future citizens. Investment migration has the chance to help shape our future societies, redefine global mobility and reposition our understanding of where we are from in favour of a more fluid concept.

BIO: Martin O’Connor is the CEO of Kylin Prime Group. highly experienced in international affairs and organisational development, he has worked in complex business, political and regulatory environments. he has led teams involved in mergers, JVs and partnerships, and coached executives from the world’s leading brands.