By Anayat Durrani
South Korea has come a long way from a poor agrarian society to a highly industrialized nation. Today it is the fourth largest economy in Asia and the 11th largest in the world. Even with the economic impact of the pandemic in 2020, the number of millionaires in South Korea increased nearly 11 percent from the previous year, according to Statista.
Close to one million high-net-worth-individuals (HNWIs) resided in South Korea in 2020 and that number grew by about 15 percent between 2015 and 2020. South Korean HNWIs are forecast to reach around 1.6 million in 2025, per Statista. With so much buying power, South Koreans are primed to invest in a second passport or residency visa in other countries.
“Investment migration has been widely embraced by investors, entrepreneurs, and HNWIs and families worldwide as a mechanism to improve their global mobility and access opportunities to grow their businesses and provide great optionality to their families in terms of where they can live, study, invest and retire,” says Dominic Volek, Group Head of Private Clients at Henley & Partners.
The growth of the South Korean market
After the end of the Korean War, South Korea transformed itself from a least developed country into a wealthy, developed nation and its rapid economic growth earned South Korea the name, ‘Miracle on the Han River.’
South Korea’s economy has been fueled by sectors like electronics, automobile production, shipbuilding, steel, and telecommunications. Kim Beom-su, founder of South Korean internet company Kakao, made the #1 spot on Forbes richest list of Koreans in 2022 with a net worth of US$9.6 billion.
Asia is expected to see the fastest growth in ultra-high-net-worth individuals over the next five years according to Visual Capitalist. South Korea is #11 on the Top 20 list of countries for UHNWI’s.
Pursuing a residency visa can be a good option for South Korean UHNWIs and HNWIs. Volek notes that though South Korea does not allow dual citizenship, except for those holding dual citizenship by birth, South Koreans are eligible to apply for residence by investment programs.
Volek says residence programs bring the benefit of enhanced global mobility, and “offer a proven risk mitigation and growth diversification strategy in terms of wealth and legacy planning with the added lifestyle advantage of domicile optionality. This is true for South Koreans as well.”
Real estate-linked investment migration programs like those in Portugal, Greece and Spain, Volek says, can be particularly attractive since they have the advantages of enhancing one’s global mobility by expanding personal access rights as a resident of additional jurisdictions.
“The potential gains over the lifetime of the investment include the core value of the asset, rental yields, and global access as an ultimate hedge against both regional and global volatility,” says Volek.
Global investment immigration programs for HNWIs from South Korea
Chai Kim, head of Korean business development for American EB-5 Visa, says a popular program in South Korea is the Turkey CBI. Kim says while many foreigners from non-treaty countries choose Turkey and Grenada passports for the E-2 benefit, she says South Koreans get the Turkey passport due to the affinity of both countries.
She says South Korea already has the E-2 treaty with the United States, however, in recent years many South Koreans have obtained Turkish citizenship.
“Like the other neighboring Asian countries that do not share the political views of China and North Korea, South Koreans also pursue a second passport as a safety net. Their increased appetite for Turkish citizenship is mainly due to this reason,” says Kim.
A 2019 report, based on a survey conducted by a think tank under KB Financial Group, that involved 400 South Korean HNWI or investors with assets of over 1 billion won, found that South Korea’s wealthy are picking real estate as their best long-term investment option.
Among South Koreans, Volek says there is growing interest in investment migration.
“In terms of enquiries, Henley & Partners saw a 47% increase in the number of enquiries from South Korea in 2020, versus 2019 enquiry stats. Last year, 2021 saw a further 28% increase in enquiries from South Korea. We anticipate this will go up again this year,” says Volek.
South Korea is among the top five largest EB-5 investor markets in the world
According to Real Capital Analytics, Korean investors maintained their interest in U.S. real estate and invested more than $5 billion in 2020.
South Korea is among the top five largest EB-5 investor markets in the world according to Department of State figures. South Korean investors made up 4.2% of EB-5 visas issued in FY2020.
“South Koreans are diligent and value education. They do not necessarily want to leave South Korea for any particular endogenous reasons,” says Kim. “Most, if not all, Koreans love their country. The exogenous pull factor of Western countries is a primary factor for Koreans seeking a second passport or residency visa in another country.”
She says future employment with better financial benefits and higher education with better international recognition are a few of the reasons South Korean clients have sought this alternative.
Kim, who was born in Seoul and graduated from Yale University, says many South Korean international students she knew had to return to South Korea once they graduated due to prospective employers not being able to sponsor them.
“Also, the parents of these second passport/residency visa students want to invest in real estate in the U.S., particularly in big cities like New York City,” says Kim.
Another motivating factor is having family already in the U.S. The number of South Koreans living in the U.S is around 1,908,000 in 2019, according to Pew Research Center.
“Many who are still back in South Korea could be interested in reuniting with their families in the United States,” says Kim.
Join us at the Uglobal Immigration Expo in Seoul, South Korea on June 16-17, 2022!
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