Ireland's IIP - The art of attracting investment that matters

The choices of international investors and businessmen when it comes to migration are quite different from how others consider a country desirable to immigrate to. These days, professionals around the world and international investors show interest in keeping a base in Europe, for which a country of choice happens to be Ireland.

In 2012, Ireland launched the Immigrant Investor Program that aimed at encouraging foreign investors to invest in Ireland to create business and stimulate employment. This EU member nation has since seen remarkable success with the program.

The program started with over 1,100 investors joining the scheme in its initial period. It’s speculated that the interest of investors in the IIP is going to increase post-Brexit.

IIP has attracted investment approximately worth €826.5 million from non-EEA nationals. Their investments have been majorly in charities or Irish businesses. These investments were made in return for the right to reside in Ireland.

In the inaugural year of IIP, €1.5 million in total was paid by investors. Registering a steady annual increase, investment came to €253.7 million in 2017. After a small decline hence, in 2020, an investment of €184.6 million was made into the economy of Ireland. This was despite the crisis of the COVID-19 pandemic.

The conditions for non-EEA nationals to get residency in Ireland by joining the IIP included being of good character and having a net worth of at least €2 million. Ireland’s residency may also be granted to the investor’s partner, spouse, or children in case the essential criteria are met.

The children under 18 years of age will be eligible for residency if the investor or their partner or spouse has legal guardianship of the child. In some cases, if children between the ages of 18 and 24 will be treated eligible for residency if they are unmarried and have a financial dependency on the investor.

The period of investment doesn’t determine how long the investor can keep the residence in Ireland. Once the investor complies with the terms laid out under IIP, they can renew their permission for residency for a maximum of 5 years at a time. Thus, they can practically keep their Ireland residency for an indefinite period of time.

Eligibility

Now, the question may be brewing in your mind as to who exactly is eligible for IIP. Here are some points to understand eligibility:

• The applicant must have a personal wealth of at least €2 million.
• The applicant must be independently wealthy without relying on funds that are solely under the ownership of another person.
• The applicant cannot take account of the assets of their spouse. An exception is granted only where there is joint ownership of assets. In such cases, the consent of the spouse is essential.
• The applicant must have the required amount of investment from their own resources. The amount for investment cannot be funded through a loan or a similar facility.
• The applicant must produce a bank’s confirmation that the investor has the power to use the funds and that the money is transferrable to a bank in Ireland.
• The applicant investor and any nominated family member above the age of 16 years must qualify with a good character. The proof for this will be the clearance certificate issued by the police for each jurisdiction in which the applicant has been living during the period required.
• The applicant must give a report of due diligence about the source of their wealth from a recognized risk agent.

Non-EEA investors have 4 options for making investments in Ireland under IIP in return for Ireland residence. They are:

• Enterprise investment
  • An investment of at least €1 million
  • Investment in either one Irish enterprise or distributed over more than one enterprise
  • Investment to be left in place for a minimum of 3 years
  • The enterprise invested in maybe a start-up set up by the investor or a registered business in Ireland
  • The investment must support the creation of employment or its maintenance
• Investment fund
  • An investment of at least €1 million
  • Investment in an approved investment fund
  • Investment to be left in place for a minimum of 3 years
  • The funds as well as fund managers to be regulated by the Central Bank of Ireland in order to do business in Ireland
• Real estate investment trust
  • An investment of at least €2 million
  • Investment in either one Irish REIT or distributed over more than one Irish REITs
  • The REIT to be listed on the Irish Stock Exchange
  • Investment to be left in place for a minimum of 3 years
  • Investor allowed to divest up to 50% of the shares bought for the IIP after 3 years
  • If the investor divests so, they may divest up to 25% more of the shares bought for IIP
  • Investor not required to retain shares after 5 years counting from the purchase date
• Endowment
  • A philanthropic donation of at least €500,000
  • A philanthropic donation of at least €400,000 in case the applicant investor is one of 5 investors or more
  • Donation to be made into a project which has public benefit to sports, art, culture, health, or education in Ireland

The Department of Justice sets priorities for IIP so that the focus stays on projects for:

• nursing homes
• social housing
• combating climate change
• facilities for primary healthcare

The Irish Times has reported that in January 2021 funds were raised via IIP as given below:

• €245 million for social housing
• €165 million to build nursing homes
• €108 million for tourism and hospitality

Seeing the results of IIP, it can be surely deduced that investment via IIP can help Ireland to bring about economic recovery post-COVID-19. This will be particularly true about the tourism and hospitality sector.

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Note:

IIP – Immigrant Investor Program

REIT - Irish real estate investment trust