|Investors Keep Close Eye on Fate of US Immigration Program|
Chinese investors are closely watching the fate of a key immigrant program in the United States, which could potentially determine whether they would continue to apply for US citizenship through this channel.
The much-publicized "Immigrant Investor" EB-5 program, is set to expire this week, while an updated legislation is in the final hours before Congress votes on Friday. As the most popular investor visa in the world for Chinese investor immigrants, the EB-5 visa is of intense interest to wealthy Chinese residents of China’s mainland, Hong Kong, Macau, Singapore and Malaysia.
The program was created by US Congress in 1990 to stimulate the US economy through job creation and capital investment by foreign investors. It offers foreign aliens a fast track to obtain a US green card, provided they invest a minimum amount of capital ($500,000 in rural or high-unemployment areas) which creates at least 10 new jobs for US citizens per alien investor. The program offers a maximum of 10,000 visas per year, which represents less than 1 percent of the total annual immigration to the United States.
Its popularity has soared in recent years, after Chinese wealthy, who now account for around 90 percent of all EB-5 visas granted, flocked to apply and caused it to hit its visa limit of 10,000 per year in 2013 for the first time. However, well-publicized EB-5 fraud scandals have drawn critics, who also accused most of the funds have flown to developed regions such as New York and San Francisco, instead of distressed areas.
The new legislation is widely expected to introduce greater scrutiny and compliance required. Hotel Lawyers, a US advocacy group for developers, predicted the minimum investment will be raised to $800,000 (from $500,000). Regional centers and investors might have to pay fees towards an "EB-5 Integrity Fund" to conduct audits and site visits.
Although it accounts for less than one out of every hundred US visas issued, the program delivered $4.4 billion of foreign direct investment to the US in the 2015 financial year alone. The Watson Institute of International and Public Affairs at Brown University estimates under the EB-5 program it costs the US government zero dollars to create a job, while it costs $89,286 to do so via military spending.
The property buyers wishing to learn more about the EB-5 increased by 400 percent in 2015 through August 2015, suggesting undiminished interest.
However, someone warned that EB-5 is more "fragile" than it seems. Canada and Australia have both seen "reformed" their investment visa schemes vastly reduced number of applicants.
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on Dec.11, 2015