The UK has retained its position as a key destination for high-rolling Chinese investors, despite fears that its exit from the European Union would make it a less attractive hub for foreign investment.

Chinese investors sank £20 billion ($28 billion) into the UK economy in 2017, becoming the top recipient of so-called golden visas.

Under the visa scheme, investors are granted the right to stay in the country in return for assets and investments totalling £2 million or more.

The number of Chinese acquiring golden visas jumped 56% in 2017, with 116 UK golden visas issued to mainland China out of a total of 355 in total, according to data from London-based private wealth firm LJ Partnership and reported by the Financial Times.

The number of Chinese investors buying their way into the UK was greater than the next biggest recipients on the list — Russia — by 250%.

The tide of investment is expected to continue as China sheds its wait and see policy on Brexit.

Charles Filmer, partner and head of private office at LJ Partnership, told the Financial Times:

… Brexit just isn’t a topic that is discussed. It doesn’t make any difference at all.

Under the golden visa scheme people can stay in the UK for up to three years if they invest £2 million or more in government bonds, share capital, and other assets — but excluding property.

After three years they can then apply to settle permanently if they have invested £5 million or more. If they invest £10 million they can apply after just 2 years.

Why it matters

The UK’s reputation as a liberal and open global finance hub has been cast into doubt by the UK’s decision to leave the EU.

As uncertainty grows over post-Brexit regulation and market stability, investors and multi-national firms have raised the prospect of relocating offices and withdrawing capital and investment.

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Yet the latest revelations show that the country continues to be a trusted place for money that China’s super-rich have managed to siphon out the country.

Liu Xiaoming, the Chinese Ambassador to the UK, wrote in an editorial in the Evening Standard newspaper last year:

Chinese investors came here for cooperation and win-win results, and they look for a business friendly and welcoming environment.

Chinese investment in UK projects — from infrastructure and equipment manufacturing to tech, energy and financial services — will continue as long as Britain secures confidence by maintaining its commitment to staying open in the Brexit era, according to Liu.

As the Brexit negotiations continue and the ensuing uncertainties and negative impacts unfold, for Britain and for foreign investors, confidence is more valuable than gold.

Total Chinese investment into the UK fetched $20.8 billion in 2017, up from $9.2 billion in 2016, according to LJ Partnership.

The US is looking less like the land of opportunity for the Chinese

Over the past few years, investors from China flocked the US, but Trump’s tough stance on immigration has raised fears they may soon no longer be welcome.

Chinese applicants currently make up four-fifths of applicants for the US EB-5 visa programme, with 90% of all US golden visa investors hailing from China last year.

Launched in 1990, the US golden visa scheme requires individuals to invest between $500,000 and $1 million in so-called targeted employment areas, creating at least ten jobs for American workers.

A 2017 Hurun Report of 304 individuals worth from $1.5 million to $30 million found the top destination for wealthy immigrants from China in order of preference were the US, Canada, the UK, Australia.

Education and living environment continue to be the main reasons for emigrating overseas for the fourth consecutive year, accounting for 76% and 64% respectively. In addition, a new motivation, the desire for an ideal living environment, accounted for 53% this year, while other reasons included medical care, with 29%.

Applicants of the program have invested more than $13 billion since 2008 in the US and have created tens of thousands of US jobs.

According to Graham Walker, the Managing Director of financial advisory consultancy GreenWorks Asia, the number of golden visas for Chinese citizens in the UK is set to rise considerably for a number of reasons.

“The cancellation of the EB-5 Program for Chinese in the US is most likely to continue given the upsurge in complaints against it domestically and the likely intensification of the trade war between China and the US,” he told Verdict.

“Chinese investors will, therefore, be looking for alternative safe havens and Britain, despite, Brexit, looks more and more appealing. Its political stability, its excellent educational structures and its adherence to international rules of law are major incentives.

“From the UK’s perspective, the continuation and probable expansion of the programme would ensure a steady supply of much needed foreign investment and more importantly facilitate the signing of a bilateral trade agreement with the world’s largest trading nation.

“The rapid deterioration in Anglo-Russian relations post-Salisbury and the Government’s clamp down on money-laundering activities is also likely to see a substantial decline in Russian applications in the near future and the possible termination of existing ones,” Walker added.