November 28, Iceland has rejected a plan by Chinese billionaire investor Huang Nubo to buy a 300 square kilometer plot of land in the country on which he intended to build a resort complex, citing legal barriers as the only reason behind the denial.
Icelandic law imposes strict conditions on corporations wishing to acquire ownership of or the right to use Icelandic property and it’s clear that Huang’s company Beijing Zhongkun Investment Group Co. does not fulfill any of the requirements, Iceland’s Internal Affairs Ministry said in a statement.
According to the ministry, a foreign company wishing to purchase land in Iceland must possess a locally registered venue to comply with local laws, while company owners must be Icelandic citizens or have lived in the country for no less than 5 years.
In addition, at least two-thirds of a foreign company’s board members must be Icelandic nationals.
$200 mln Investment Plan
Huang told the official Securities Daily that he was surprised that his bid had been rejected. He said the Icelandic side did not specify the law’s requirements at the beginning, and that his company’s investment plan in the country was inspired by the Icelandic government’s campaign to attract foreign direct investment into the country.
Huang had planned to invest some $200 million to launch a tourism property project on the parcel of land, which covers 0.3% of Iceland’s total area.
Suspicions had been growing that Huang’s plan would be rejected after his former ties with China’s central government were revealed. Local politicians expressed their fears that Beijing could be seeking to gain a strategic foothold in the North Atlantic through the deal.
Won’t Give Up
Despite the rejection, Huang said he would continue to seek opportunities in the Scandinavian region, and plans to build resorts in Denmark, Finland and Sweden within 5 years.
“There are still many opportunities to invest in those countries, as we’ve been approached by [authorities from] Denmark and Sweden. But from this experience, we need to take political environment into consideration in addition to economic and natural environments when we plan to invest in a foreign land,” Huang told the Securities Daily.
The former Chinese government official and Peking University student said building resorts across the world would be “a dream”, as privately held Chinese enterprises are advancing with a globalization drive.
A gloomy Western economy and the rising strength of Chinese enterprises are making it the golden time for Zhongkun to invest in foreign countries, according to Huang, who also claimed that China’s current property curbs are part of the reasons behind his determination to invest in Iceland.