Tuesday 19 November 2019

Barrett firm hits out at immigrant investor hike

Richard Barrett of Bartra Capital. Photo: Maxwells
Richard Barrett of Bartra Capital. Photo: Maxwells

Simon Rowe

A row has erupted between the Government and one of Ireland's largest property-investment groups over changes to the Immigrant Investor Programme.

Bartra Capital Property Group has warned officials that new rules introduced in January to raise the investment threshold for applicants to the state investment-for-residency scheme could have a "catastrophic effect on the volume of applications, FDI and job creation".

Bartra, the investment management firm founded by developer Richard Barrett, is one of three major funds authorised by the Central Bank to raise capital through the Immigrant Investor Programme (IIP).

Officials at the Irish Naturalisation and Immigration Service announced new thresholds for qualifying investments in January, raising them from €500,000 to €1m. The threshold was raised after a spike in IIP applications in 2016, believed to number about 330.

A total of 130 applications have been approved since the scheme was launched in 2012, resulting in €65m of investments. Department officials said that €1m was the original threshold when the scheme started and was only changed given the then poor take-up by overseas investors.

The Department officials said that this was attributable to the state of the economy at the time, adding that the decision to raise the threshold was justified as "Ireland was in a different place now".

But representatives of Bartra Capital told officials they were "shocked and dismayed at this sudden and unexpected decision", in documents seen by this newspaper.

"This decision comes at a time when our economic recovery faces very serious challenges with the potential of a hard Brexit and the impact on FDI of the Trump administration in the US.

"The pricing decision is very risky and may turn out to be bad for the economy, bad for business and bad for the country.

"Ideally such a significant decision should not be made without a full analysis of the scheme, its potential scope and the costs and benefits of the scheme itself."

A Bartra representative has written to Department of Justice officials calling for a review of the decision and recommending consultation with stakeholders.

"I would urge you to delay the implementation of the decision until a full and through review of the scheme is undertaken and not until after all the stakeholders are consulted."

Bartra claims that following the UK's decision to double the investment threshold for its immigrant investor scheme, applications plummeted by 83pc.

"In Canada, an increase from a $800,000 threshold to €2m reduced numbers dramatically.

"They predicted 2,200 and received six. The US has also halted a plan to increase investment levels because of its potential impact," wrote a representative.

Chinese investors in particular have piled into the Immigrant Investor Programme over the past three years.

There are now more than 5,000 agents in China promoting Ireland's invest-for-residency scheme, according to industry sources.

Non-EEA investors are granted residency in exchange for investing in Irish bonds, stocks, property and enterprises, or for making a large philanthropic gift or endowment.

The Immigrant Investor Programme is open to non-EEA nationals and requires a minimum investment of €1m, which must be pledged for a minimum of three years.

Approved participants are granted residence in Ireland for two years, which can be renewed for a further three years.

After five years, they are entitled to apply for long-term residence in Ireland.

Irish residency status can offer non-EEA investors greater ease of travel in the EU and can offer benefits in terms of tax avoidance and asset security.

The principal investor focus is on social housing, healthcare, education and renewable energy.

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