South Korea’s immigration program that offers permanent residency status in exchange for big property investments from foreigners has been abused for property speculation and gains mostly by the Chinese, a ruling party lawmaker claimed.

Under the program initiated in 2010, the number of property acquisitions by foreign investors amounted to 1,889 cases worth 1.33 trillion won ($1.1 billion) as of the end of August this year, according to an analysis by Rep. Kim Chung-woo of the ruling Democratic Party based on data from government agencies on Wednesday.

But the number of green card winners with the program was only 87, a mere 4.6 percent against the number of investment cases.

Although touted as an inducement for foreign investment, the policy turned out an empty measure, the lawmaker pointed out. Critics say the program is misused by foreign speculators in the property market. The program offers a green card to foreign investors who bring more than $500,000 to buy condominiums, pensions or other property in 10 designated regions across Korea after five years of such investments.

The program is now applied to 10 areas in Korea, while running for five years in Jeju, Pyeongchang in Gangwon, Yoesu Gyeongdo in Jeonnam and Youngjong in Incheon.

But the current performance by region is disappointing. About 99 percent, or 1,875 investment cases worth 1.32 trillion won, were realized only in Jeju as of August. All of the 87 green card winners chose the island as their investment destination.

Incheon attracted a mere 4.8 billion won (8 cases) and Pyeongchang 3.3 billion won (6 cases). No investments have been realized in Yeosu since it was designated under the program in 2011.

The nationalities of foreign investors granted permanent residency under the program were mostly Chinese with 82 persons, followed by Cambodia (3), Hong Kong (1) and the U.S. (1).

The current strained Sino-Korean relationship can impair further investments from China, making it more difficult to improve the immigration program, critics say.

By Kim Kang-rae and Minu Kim

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