Contact The Team


Subscribe to our mailing list


* indicates required

A Welcome Development – New and Improved Immigrant Investor Programme planned for 2019


Wednesday, December 19, 2018

Philip Lee welcomes the recent announcement by the Irish Naturalisation and Immigration Service (INIS) confirming that the Immigrant Investor Programme (the “IIP”) will continue to run in 2019 and will be subject to review and revision to maintain the Programme’s high standards.

Ireland’s IIP is a residence by investment programme which was introduced in 2012 to attract much needed foreign direct investment (FDI) into the State (for more details see here). The Programme can be credited with the injection of over half a billion euros into the Irish economy since its inception. Charities and other non-profit organisations delivering valuable health, educational and social care projects of importance to the State have been donated around €30m by persons who have availed of the Programme. Many of the most influential charities in the State have been enabled, through these donations, to deliver projects to the benefit of the homeless, sick and disadvantaged members of our society.

It is a strong measure of the Programme’s success that over 50% of the investments made by applicants in 2018 are being used to increase the State’s supply of social housing, to fund primary care centres and to extend our nursing home capacity. The opportunity to further harness the Programme to target investments towards these areas of critical national importance is one which should not be lost.

Nevertheless, residence by investment programmes can pose risks to countries both in terms of reputation as well as security and money laundering and must apply robust application procedures and be kept under review to manage such risks.

Confirmation of the 2019 application windows, together with the planned external review and revision of the Programme, bodes well for the future of the IIP.

Application windows for 2019 

As announced by INIS this week, IIP applications will be accepted during the following ‘application windows’ during 2019:

  • Window 1: 4 March 2019 – 8 March 2019
  • Window 2: 20 May 2019 – 24 May 2019
  • Window 3: 19 August 2019 – 23 August 2019
  • Window 4: 21 October 2019 – 25 October 2019

Given that the latest window closed at the end of October 2018, it may be disappointing for some that the next opportunity for IIP applicants and enterprises to submit applications will be as far away as March 2019. Nevertheless, it would appear this time-frame is being influenced by the clear desire on INIS’s part to ensure the Programme continues in a credible and robust manner.

Departing from the practice of previous years, INIS is allowing for four windows for applications in 2019, each of which will only be open for 4 days which is much shorter than before. It is hoped that this more focused window system will allow for more efficient application processing and the issuing of decisions more promptly.

INIS has highlighted however that these windows may possibly be varied in light of the findings of an Independent Review of the IIP which is due to commence in the early 2019.

Revised application guidelines for 2019

INIS have also confirmed that revised guidelines for the Programme will be published on or before 8 February 2019. It will be compulsory for future applicants to comply with these revised guidelines meaning that any preparation currently being undertaken may need to be revisited prior to submission of applications in March 2019.

Interestingly, the notice refers to the publication of these revised guidelines as being ‘in accordance with practice’ and it is indeed true that revised guidelines were published over the Christmas break last year. However, it is hoped that some certainty and stability can be built into the Programme following the reviews being carried out in 2019 to avoid this continuous annual revision.

Consistency, stability and reliability are key ingredients in the success of Ireland’s FDI policy to date. The IIP, being a vehicle for FDI, needs this certainty and reliability in just the same way as any other FDI programme.

With revised Guidelines (and possibly a revised application form) being developed, the situation will accordingly need to be kept under review.

Independent Review

Over the past number of months, the Department of Justice has confirmed its plans to carry out an independent review of the IIP. The terms of reference for the review (as previously published) confirm that the Department wishes to assess the Programme’s “governance and oversight arrangements”, amongst other things. The review is expected to be completed by February 2019, although this timeframe appears optimistic by any standard.

The impetus for the review appears to have been prompted by a series of developments in the course of 2018 which saw residence and citizenship by investment schemes across the EU and further afield being subjected to increased scrutiny by many bodies including the European Council and Commission and the OECD.

In October, the OECD published a report analysing residence and citizenship by investment schemes both in Ireland and other countries. The report highlighted a number of issues among them how some such schemes can be misused to hide assets held abroad by applicants. Not surprisingly, Ireland’s IIP was not identified by the OECD as a programme of concern, reflecting the high standard to which the IIP is presently operated. Ireland’s Programme is also distinguishable from others for a number of reasons including that it is solely residence and not citizenship which is imparted on successful investors, detailed due diligence requirements and proof of source of funds is required and no special tax benefits are extended to investors under the Programme outside the normal tax regime.

Nevertheless, and rightly so, INIS are clearly anxious to ensure Ireland remains absolutely compliant with all relevant financial and tax obligations (including the OECD/G20 Common Reporting Standards) and to ensure the IIP is not misused in any way and that the public continue to have confidence in the scheme.

In their latest announcement, INIS have confirmed that they are engaging in data sharing in accordance with the OECD common reporting standards. They have also highlighted that they will be applying enhanced levels of due diligence processes in respect of AML, KYC, PEPs and sanction checks in 2019. Applicants and investment projects, as well as charities seeking to receive donations under the Programme, are advised to ensure they are fully compliant with all relevant and applicable regulations.

Coinciding with these developments, the Law Society of Ireland has amended its Anti-Money Laundering (AML) Guidelines to solicitors, following the passing of the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2018 earlier last month. The increased AML obligations on solicitors pursuant to these new rules will also assist in combatting any potential abuse of the IIP scheme, something which was also highlighted as a potential area for reform in the OECD report.

The future

Overall these announcements and clarifications on the IIP are to be welcomed. It is vital that any such schemes are consistently monitored and improved in order to maintain public confidence and ensure the scheme’s continuation into the future. Enhanced transparency and accountability structures should be adopted along with measures to close off any possibility that the Programme can be exploited.

Ireland should strive to offer a world class programme which prioritises the quality of investments and investors over quantity and which places transparency, accountability and robust qualifying criteria to the fore.

For further information on the IIP, please feel free to get in touch with any member of our immigration group.

 

Article written with the assistance of Shaunagh Byrne.


Author

Aoife Gillespie

SENIOR ASSOCIATE


Top.