Hong Kong turmoil pushes wealthy residents to seek safe haven in US and Portugal

Pedro Gonçalves
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Hong Kong turmoil pushes wealthy residents to seek safe haven in US and Portugal

As protests and police actions intensify, Hong Kong's wealthy are increasingly looking to buy homes in the United States and relocate there.

Edward Mermelstein, a wealth management consultant based in New York, told SCMP that over the past two weeks, his company has received four inquiries from Hong Kong clients about relocating their families to the US, with the intention of investing between $10m to $100m, he said.

Mermelstein said it was "an extremely unusual situation". "Hong Kong residents were typically just investors and had no interest in becoming US residents. But today, the conversations are definitely about relocating families and businesses," he added.

There is a clear demand from the Hong Kong clients that they want to prevent the social unrest from disrupting their lifestyles, and they want to recreate comfort and safety for their families"

Hong Kong's 10-week political crisis, which has seen millions of people take to the streets calling for a halt to sliding freedoms, was already the biggest challenge to Chinese rule of the semi-autonomous city since its 1997 handover from Britain.

The two days of mass flight cancellations at one of the world's busiest airports have further raised the stakes for the financial hub.

"There is a clear demand from the Hong Kong clients that they want to prevent the social unrest from disrupting their lifestyles, and they want to recreate comfort and safety for their families," Mermelstein said.

"Given there is no sign that things are improving, I expect there will be a continued rise of interest from Hong Kong's high-net-worth individuals regarding relocating to the US," he added.

Inquiries from Hongkongers about property in Portugal have also seen an upswing.

"We have seen more inquiries about Portugal properties from Hong Kong buyers in the past few months. Many see Portuguese residency an alternative option in Europe," Binoche Chan, chief operating officer at List Sotheby's told SCMP.

"The entry requirements are relatively low against other popular destinations."

The protests have disrupted flights at Hong Kong's airport, leading to postponement of business activities such as meetings, deal discussions, and others, pushing many global companies with major presence in the city to initiate contingency plans for their businesses and employees, the Wall Street Journal reported.

One such company, France-headquartered AXA, has around 2,000 employees in Hong Kong. According to Gordon Watson, AXA's Asia chief executive, the company has security teams closely monitoring the situation in the city. Several times, its employees have been asked to leave the office early for their safety.

AXA has instructed its managers to allow flexible working arrangements for employees, including working remotely from home.

"We advise our people to be cautious, stay alert and remain calm," Watson said, adding that the company has contracted a third party to set up a hotline that provides counselling and other advice for employees and their dependents.

Citigroup has closed several branches as a precaution, according to a company representative, and has encouraged customers to use mobile channels instead.

BlackRock has postponed a two-day conference at the Four Seasons Hotel in Hong Kong, according to a spokesperson.

Beijing is sending increasingly ominous signals that the unrest must end, with state-run media showing videos of security forces gathering across the border.

The protests in Hong Kong began in opposition to a bill that would have allowed extraditions to the mainland, but it quickly evolved into a broader call for more freedom and democracy in the semi-autonomous territory.

 

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