China's push back on dual passports may derail investment immigration schemes

By Lam Ka-sing kasing.lam@scmp.com / https://www.scmp.com/property/hong-kong-china/article/3022633/chinas-push-back-dual-passports-may-derail-investment?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp | August 21, 2019 5:49 PM SGT
Global real estate investment flows could be disrupted if the authorities in mainland China were to crack down on the country's booming trade in ­second passports.
Tens of thousands of high-net-worth individuals in the mainland could be affected if authorities restricted the practice of buying property in a foreign country as a way of acquiring a second citizenship, experts said.
The possibility of such action was highlighted earlier this month when Sun Xiang, a National People's Congress delegate from Hebei province, was outed on social media as having a passport from the Caribbean island nation of Saint Kitts and Nevis, issued in 2011. He was removed from office two days after the post went up on August 4.
Beijing does not recognise dual nationality, and any individual who obtains a second passport is required to renounce their Chinese citizenship.
"This high-profile second citizenship scandal could lead to a crackdown on wealthy and influential Chinese who have obtained second and even third passports without renouncing their Chinese citizenship," said David Lesperance, an international citizenship and tax law expert at Lesperance & Associates. "Tens of thousands of individuals in mainland China likely have a second passport."
Such a crackdown was likely to dampen Chinese enthusiasm for investing in overseas property for the purpose of gaining citizenship, Lesperance said.
"I estimate that up to 95 per cent of Chinese who obtain foreign citizenship by property investment do not intend to renounce their Chinese citizenship," Lesperance said. "It's a simple question of economics. If you can afford to buy a foreign passport, you clearly are doing well financially, and China may be the place where you can earn the highest income."
Other property experts said Chinese investors in overseas real estate have long been aware of the rule, however it has had little impact on purchasing decisions.
"Sun obtained his second passport from Saint Kitts and Nevis. The country obtains 45 per cent of its government revenue from citizenship by investment fees,"...