The SCMP reported today that The Gambia is proving to be a popular detour for Chinese seeking residency in Hong Kong. However, this is by no means a new phenomenon. Webb-Site reports that in 2012, over half of approved applicants under the Capital Investment Entrant Scheme came from The Gambia, a country that most applicants probably never set foot in. SCMP:
It takes six 4cm-by-6cm headshots, 15 working days and roughly HK$100,000 to gain residency in western African country, according to visa agencies in Yunnan and Guangdong provinces. No visit to the country is required.
Of course, getting residency in Hong Kong is a much tougher affair, with a minimum investment of HK$10 million. However, the Gambia does get rid of the pesky little step of obtaining foreign residency. Thus, for the very rich, the barrier to entry to Hong Kong is not much of a barrier at all.
Webb-Site explains how the Gambia and nearby Guinea-Bissau are helping turn Hong Kong into a Chinese tax haven:
It is part of HK’s value proposition to be a convenient offshore tax haven for wealthy mainlanders, just as Monaco is to Europe, and as Jersey, Guernsey and the Isle of Man are to the UK. If mainlanders establish HK residency, then after 7 years here they will qualify for permanent residency and, because they are Chinese nationals, they will then also qualify for an HKSAR Passport.
[…]More importantly in many cases, as HK residents, mainlanders under CIES will not pay taxes on investment income, capital gains and death.
As the chart above shows, this abuse of the CIES is hardly new, but has mushroomed in the past few years. While Hong Kong prides itself on its economic freedom, it must take steps to ensure these freedoms are not abused.
ADDENDUM: The SCMP had earlier reported that post-handover mainland immigrants now make up 10% of Hong Kong’s population (not counting the children they may have had here). Very worrying if you’re a local.