The CCAC released an “investigation report on the vetting and approval of ‘major investment immigration’ and ‘technical immigration’ by the Macao Trade and Investment Promotion Institute”, where it points out the Macao Trade and Investment Promotion Institute (IPIM) lacked stringent vetting and approval and checking mechanisms for “major investment immigration” applications, the investment amounts of some “major investment immigration” investment projects were too low and too large proportion of the investment amounts in some of the “major investment immigration” projects applications were about immovable property investment. When processing the “technical immigration”, there were such problems as lack of stringent vetting and approval criteria, “technical immigration” applicants rarely stayed in Macao and obtaining temporary residency through fictitious employment.
The CCAC points out that once it has continuously received reports and complaints pertaining to “major investment immigration” and “technical immigration” in recent years, and there were indications of problems in the relevant systems and implementation, the Commissioner Against Corruption ordered an inquiry into the vetting and approval procedures for “major investment immigration” and “technical immigration” applications carried out by the IPIM.
Situation of vetting and approval of applications for “major
investment immigration” and “technical immigration”
In accordance with Administrative Regulation no. 3/2005, Temporary Residency Regime for Investors, Management Personnel and Specialised Technicians, non-locals may apply for temporary residency by “major investment” or being employed as management personnel or specialised technicians, which is commonly known as “major investment immigration” and “technical immigration”. Apart from the applicant, his spouse, co-habiting partner or child under 18 may also apply for temporary residency at the same time. When the applicant and his family members have resided in Macao as temporary residence permit holders for seven years, they are eligible to apply for permanent residency in Macao in accordance with relevant laws.
According to the information on the IPIM’s website, between 2008 and 2017, it received a total of 574 applications for “major investment immigration”, of which 186 were approved after assessment, with 410 people granted temporary residency. During the same period, the IPIM received a total of 5,039 applications for “technical immigration”, of which 3,296 applications were approved and a total of 5,376 people were granted temporary residency.
Problems found in the vetting and approval procedures
for “major investment immigration”
Although the IPIM had improved the vetting and approval procedures for “major investment immigration” applications through introducing the points scheme and increasing the reference minimum investment amount, the CCAC found that the IPIM lacked stringent vetting and approval and checking mechanisms for the investment amount and implementation of the investment projects. The problems are presented in the following aspects:
- Investment amount of some “major investment immigration” investment projects being too low
“Major investment immigration”, as its name suggests, requires the applicants to make significant investment before temporary residency may be granted. When it comes to significant investment, either the field of the investment project should be a more important one or there is a larger investment amount. However, during the investigation, the CCAC found that many approved applications for temporary residency.
Although Administrative Regulation no. 3/2005 does not have definite provisions for the minimum investment amount for “major investment immigration”, according to the IPIM’s internal guidelines, the reference minimum investment amount used to be MOP1.5 million prior to 2015 - same as that required for the application for immigration through purchase of immovable property. However, according to the data provided by the IPIM, in the 186 approved initial applications for temporary residency between 2008 and 2017, the investment amounts declared in 28 of the applications were less than MOP1.5 million, accounting for 15.07% of the total.
The CCAC considered that the social and economic benefits brought by an investment cannot be evaluated merely by the investment amount. However, before the IPIM raised the reference minimum investment amount to MOP13 million in November 2015, the investment amounts in the approved applications of “major investment immigration” were, in general, relative low, while many of them involved traditional businesses such as catering, tourism, trading, investment and construction. These investment projects could not fully reflect the “significance” of the investments and made it difficult to achieve the legislative objective to enhance the economic development and diversify the industries of Macao.
- Too large proportion of the investment amounts in some of the projects in “major investment immigration” applications were about immovable property investment
When processing the applications for “major investment immigration”, the IPIM includes the expenses of purchase or rental of immovable property and refurbishment of operation facilities into the investment amount. Since the investment amounts were relatively low in general and the prices and rentals of immovable properties in Macao were relative high, a very large proportion of the investment amounts in the investment projects in the “major investment immigration” applications was related to property. In the 186 approved initial applications for temporary residency by “major investment immigration” between 2008 and 2017, the businesses run by 11 companies were about “real estate investment and development” or similar ones. Moreover, in one application, the business ran by the relevant company was merely “property investment”.
According to Administrative Regulation no. 3/2005, there are two types of “major investment immigration”. One may apply for temporary residency by “major investment” or “major investment plan”. The CCAC found in the investigation that some applicants firstly submitted a so-called “investment plan” and were granted temporary residency. When applying for renewal, they submitted the property registration certificates proving purchase of immovable property under the name of the companies in order to create a false impression that the investment plan had already been implemented. They made use of the IPIM’s practice of attaching importance to immovable property investment when processing the applications and managed to obtain temporary residency with fictitious investment projects.
On 3rd April 2007, the Macao SAR Government promulgated Administrative Regulation no. 7/2007, which suspended the implementation of the regulation on application for temporary residency by purchasing immovable property. The CCAC considered that some people might not truly intend to invest in Macao. Instead they packaged purchase of property into a major investment project. The ultimate purpose of “disguising purchase of property as investment” was to obtain the right of abode in Macao. Therefore, the IPIM should not consider an investment project as “major” simply because the applicant has purchased immovable property as major investment. Otherwise, “major investment immigration” would simply become “immigration by purchase of property”. In this sense, such practices have contradicted not only the legislative intention to attract major investments from other places but also the SAR Government’s policy of suppressing property price.
- Lack of stringent vetting and approval and checking mechanisms
According to the requirements of the IPIM, applicants of “major investment immigration” should provide business registration, business licences, financial statements and tax payment confirmation of their companies as well as proof of the investment amount and business revenues. The IPIM usually conducts formality checking on these documents submitted by the applicants only. It does not verify the authenticity of the documents and the truthfulness of the facts in a serious manner. They do not send staff off to the claimed operating locations of the companies to verify their operations either.
During the investigation, the CCAC also discovered the following situations: the companies claimed by the applicants had no actual operation or had stopped operation; the locations of the claimed companies were left empty for a long while or used for other purposes; phone calls made to the claimed companies were unanswered or the phone numbers were not in service; no information about the claimed companies could be found on the internet, etc. In response to such phenomena, the IPIM once opined that the bureau itself was just an administrative department without inspection and law enforcement powers. It was therefore difficult for them to carry out holistic inspections and verifications. However, in the CCAC’s opinion, as a department responsible for vetting “major investment immigration” applications and making approval suggestions, the IPIM is duty bound to verify the authenticity of the application documents and check the implementation status of the projects. After all, such issues are not only the prerequisites for application approval but also the duties of a public department.
Problems found in the vetting and approval procedures
for “technical immigration”
According to the investigation of the CCAC, during the IPIM’s processing of the “technical immigration” applications, there were such problems as lacking stringent vetting and approval criteria, applicants not staying in Macao for a long period of time and obtaining temporary residency by means of fictitious employment.
- Lack of stringent vetting and approval criteria for “technical immigration”
According to Administrative Regulation no. 3/2005, the category of “technical immigration” covers two types of persons, namely management personnel and specialised technicians. The prerequisite for approval is that the academic qualifications, professional qualifications and experience possessed by the applicant are particularly beneficial to the Macao SAR. After the investigation, the CCAC found that there were applicants who did not possess professional/academic qualifications, whose professional backgrounds did not match with their work positions, or whose jobs had nothing do with managerial or professional skills.
During the investigation, the CCAC found that the positions of some applicants were questionable and some applicants lacked tertiary education qualifications. Some applicants were also found to only list their past work experience without submitting any proof, while the IPIM, without making any verification, directly based on the work experience and seniority claimed by the applicants and suggested approvals for their “technical immigration” applications.
With regard to the problem that the work performed by the applicants was not considered a “professional skill”, the CCAC believed that the technical immigration applications should not be approved. Otherwise, it will blur the boundary between management personnel/specialised technicians and non-resident workers. This will also be a departure from the original intention of attracting managerial and technical professionals through “technical immigration”.
(2) Applicants for “technical immigration” rarely stayed in Macao
The CCAC has analysed the travel records of over 600 applicants for “technical immigration” and discovered that over 100 of them rarely stayed in Macao or only stayed for a very short period of time every year. Even some of them stayed for less than 10 days every year. Following an in-depth investigation, the CCAC found the situations in which the actual duty of the applicant was not consistent with his job title as declared in the application or he was doing a job which was not related to Macao.
According to the internal legal opinions of the IPIM, the law presumes that Macao SAR Resident Identity Card holders usually reside in Macao. Also, the law on residency by investment does not deem the length of time the applicant stays in Macao as one of the criteria for the vetting and approval of application for “technical immigration”. Therefore, when processing the applications for renewal of temporary residency, the IPIM did not check whether or not the applicant had stayed in Macao and the length of time of his stay.
The CCAC considered that applicants for “technical immigration” should stay in Macao to serve local companies and institutions. If the applicant can work for a Macao company outside the territory, normal employment is enough and it is not necessary to apply for temporary residency in Macao by “technical immigration”. The fact that the applicants merely stay in Macao has gone against the legislative intent to attract management personnel and specialised technicians to Macao in order to enhance local economic and social development.
(3) Obtaining temporary residency through fictitious employment
The CCAC discovered in the investigation that some applicants for “technical immigration” obtained temporary residency permits through alleged fictitious employment relationship. For example, an applicant was not in Macao for very long time but he earned good pay from a company operated poorly, raising doubts on fictitious job position and employment.
The CCAC considered that when assessing the applications for “technical immigration” or renewal, the IPIM would have easily found the doubts about fake employment in the above cases. Therefore, the IPIM should be very alert to the illegal acts which might exist and promptly follow up the doubtful cases. If necessary, it may seek help from the departments with criminal investigative competence to investigate whether the situations of “fake talent” or “fake employment” exists in order to ensure that the legal regime of “technical immigration” will not be abused.
Opinions and suggestions from CCAC
The CCAC stated that the purpose of carrying out the inquiry into the IPIM’s vetting and approval of applications for “major investment immigration” and “technical immigration” is to review the problems existing in the relevant administrative procedures and the operation of the department and thus enhance the improvement of the relevant mechanisms. To sum up, the CCAC considered that the following matters deserve the attention of the relevant department:
- To timely revise the law in order to plug the loopholes in the mechanisms
The CCAC has noticed that over the recent years, the policy of “major investment immigration” and “technical immigration” and the assessment and approval of the applications have been more stringent. Also, the IPIM has conducted stricter analysis and investigation of the cases with doubts. However, the loopholes existing in the mechanisms cannot be plugged simply by restricting and assessing the applications stricter. The CCAC believed that since the legal regimes of “major investment immigration” and “technical immigration” have been implemented for over ten years, the SAR Government should comprehensively review the idea of the regimes and the implementation and make amendments to the outdated stipulations and solve the problems existing in the regulations as soon as possible.
- To make the procedures transparent in order to minimise the occurrence of irregular situations
The CCAC stated that the public lacked of understanding of “major investment immigration” and “technical immigration” and the IPIM merely took the initiative to publicise the policy in Macao over years. The CCAC considered that the IPIM strictly assessed the applications for “major investment immigration” and “technical immigration”, but being strict did not mean that the policy and related information may be made secret. Otherwise, it would be difficult to achieve the goal to attract investments and talents from other places. Only ensuring the transparency and openness of the application procedures and the results of vetting and approval to the largest extent may prevent the illegal cases of irregular and even illegal acts.
(3) Attracting talents to Macao through mechanism overhaul
Today, the surrounding regions are faced with fierce competition for talents and would employ different means to lure talents. Macao should utilise and optimise the current “technical immigration” policy and create a synergistic effect by introducing outside talents and nourishing locals. In the CCAC’s opinion, doubting the effectiveness of the “technical immigration” system or denying its significance simply because there are problems in the vetting and approval process is just a case of “not eating for fear of choking” or “trimming the toes to fit the shoes”. To sustain development Macao should not exclude the idea of introducing talents from other places. Being too complacent with its existing talent policy or making it confined to locals will be no different from giving up its own competitiveness.
According to the recommendations of the CCAC, the IPIM should improve the vetting and approval procedures for “major investment immigration” and “technical immigration” applications, establish checking mechanisms for the relevant cases, carry out promotion of the relevant policies and publicise the criteria and results in a timely manner. The SAR Government should also make timely amendments to Administrative Regulation no. 3/2005 so the relevant legal regime may be improved.
The full report may be downloaded from the CCAC’s website.