A high stakes tug-of-war between many countries throughout the world to attract foreign investment money in exchange for fast-track permanent resident visas is generating both enthusiasm and caution in wealthy foreign investors. Prosperous and stable nations such as the U.S., Australia, Canada and New Zealand are stepping up their competition to stimulate economic growth through a variety of investment-related visas and citizenship programs that by-pass traditional waiting periods and quotas. These programs, now commonly known as millionaire visas, are becoming versatile and successful funding alternatives for business projects. However, participation in these programs has also occasionally led to disastrous outcomes for the foreign investors.
In the U.S., the EB-5 Investment Visa Program, administered by the U.S. Citizenship and Immigration Services (USCIS), has reached new heights of popularity with U.S. businesses seeking to raise and use foreign investment money to fund projects. The Ombudsman’s Office, an agency of Homeland Security responsible for assisting potential citizens with immigration issues, recently released its 2013 Annual Report, and concluded that there was a 300% increase in EB-5 filings requesting residency from 2010 through 2012. In 2012, there were over 6,000 EB-5 visa petitions filed with USCIS. Investors from China and South Korea have led the way, and dominate the per country number of new EB-5 petitions.
For the most part, the U.S. EB-5 program had been a model of stability and safety for foreign investors. For an investment of $1,000,000, or $500,000 in designated targeted employment areas, foreign petitioners can receive a conditional green card permanent visa for two (2) years, with the conditions being removed if the investment project meets certain job creation and economic benefit requirements. Foreign investors can invest directly in individual business projects or through designated regional centers that generally specialize in larger-scale projects involving multiple investors and millions of dollars in investment capital. The program is simultaneously gaining widespread interest Annual Reand acceptance among American business owners and developers, and projects ranging from huge real estate deals to fast-food franchises to mom-and-pop businesses are now seeking EB-5 money.
These EB-5 investor visas are authorized by USCIS in addition to traditional visa tracks and quotas, and allow the foreign investors to buy their way into permanent residence for themselves and their immediate family. However, the job creation requirement (10 full-time positions within 2 years) and other visa conditions must be strictly followed, or the foreign investors can lose their investment and their visas and be forced to return to their home countries!
All EB-5 petitioners must seek qualified legal, business plan, economic impact and marketing professionals to assist them in negotiating through the complex process of obtaining an EB-5 visa. According to Lauren Cohen, the president of e-Council, Inc.com, a professional firm that specializes in helping investors craft acceptable EB-5 and other investment visa business plans, “Foreign investors need professional guidance in every aspect of applying for these complex visas. Professional assistance can make the difference between an approved visa petition and a successful business project, or a denied petition and years of legal entanglements.”
A recent example of an EB-5 project gone wrong shows that EB-5 investments are not always safe investments for foreign investors. In the first SEC enforcement action of its kind, on February 8, 2013, the SEC filed civil charges against, and received an emergency order to freeze assets of, the Intercontinental Regional Center Trust of Chicago, a designated regional center under the EB-5 Program and its principal. Additionally, in New Orleans, foreign investors have accused principals of a regional center of diverting $13.5 million into sham companies that funneled the money back to the principals. Other federal civil lawsuits accuse regional centers of pushing investors into overly risky deals while collecting huge fees on the transaction.
Despite these concerns, the U.S. and other countries are all looking to roll out and expand additional investment visa programs. This new market for investment capital from the new “super-rich” in China, India, Latin America and other emerging markets is growing. Legal and financial advisors believe that political uncertainty in many of these markets, and in the Middle East, will only add to the visa investment program frenzy as foreign millionaires seek to find economic and financial security in established political and economic climates.
The competition for foreign investment dollars has pushed some countries to lessen requirements for investment visas and some nations are moving toward systems where investors have no criteria to meet other than to place a significant sum of money into the visa sponsoring nations economy, either through government bonds or through other specialized investment vehicles designed to stimulate the national economy.
For example, in Canada an investment visa is issued when an experienced business person with a net worth of over $800,000.00 makes an investment in a business that meets two of the following criterion (1) the business generates over two (2) full-time jobs per year, (2) the percentage of equity multiplied by the total annual sales is equal to or greater than $500,000, (3) the percentage of equity multiplied by the net income in the year is equal to or greater than $50,000, or (4) the percentage of equity multiplied by the net assets at the end of the year is equal to or greater than $125,000.
In Australia, a foreign investor must make an investment of at least AUD$5 million into state or territory government bonds, Australian Securities and Investment Commission regulated managed funds with a mandate for investing in Australia and/or direct investment into Australian companies. In New Zealand an investment visa is issued for an investment of NZ$1.5 million into bonds, equity holdings or a residence development. In Cypress, officials simply require a deposit of $15,000,000 in a national bank
In China and elsewhere, the promotion of investment visas has become a big business on its own, with brokers and agents for businesses seeking foreign investors presenting high-pressure investment seminars, and recruitment conventions around the country. Backlash against potential fraud and poor projects is becoming more prevalent, and many Chinese investors have become wary of large regional center projects in the U.S. and are seeking more individualized projects with which to become involved when seeking such visas.
It is clear that EB-5 and other investment visa projects will continue to be a viable and growing segment of foreign investment in many countries around the world. Businesses seeking a new source of funding see investment visas as a great source of non-traditional funding for projects. Foreign investors seem to be infatuated with the investment visa process as well, but are looking at available opportunities with caution and an eye toward more control over the process. The next few years should provide governments around the world with the opportunity to refine these programs to provide safe and workable solutions for global investors seeking a stable new home country – and are willing to pay big bucks for that new residence.
To find out more about professional, well-researched, articulate, expository narrative Business Plans, crafted specifically to address USCIS’s concerns, contact e-Council Inc.com at info@ecouncilinc.com.
A high stakes tug-of-war between many countries throughout the world to attract foreign investment money in exchange for fast-track permanent resident visas is generating both enthusiasm and caution in wealthy foreign investors. Prosperous and stable nations such as the U.S., Australia, Canada and New Zealand are stepping up their competition to stimulate economic growth through a variety of investment-related visas and citizenship programs that by-pass traditional waiting periods and quotas. These programs, now commonly known as millionaire visas, are becoming versatile and successful funding alternatives for business projects. However, participation in these programs has also occasionally led to disastrous outcomes for the foreign investors.
In the U.S., the EB-5 Investment Visa Program, administered by the U.S. Citizenship and Immigration Services (USCIS), has reached new heights of popularity with U.S. businesses seeking to raise and use foreign investment money to fund projects. The Ombudsman’s Office, an agency of Homeland Security responsible for assisting potential citizens with immigration issues, recently released its 2013 Annual Report, and concluded that there was a 300% increase in EB-5 filings requesting residency from 2010 through 2012. In 2012, there were over 6,000 EB-5 visa petitions filed with USCIS. Investors from China and South Korea have led the way, and dominate the per country number of new EB-5 petitions.
For the most part, the U.S. EB-5 program had been a model of stability and safety for foreign investors. For an investment of $1,000,000, or $500,000 in designated targeted employment areas, foreign petitioners can receive a conditional green card permanent visa for two (2) years, with the conditions being removed if the investment project meets certain job creation and economic benefit requirements. Foreign investors can invest directly in individual business projects or through designated regional centers that generally specialize in larger-scale projects involving multiple investors and millions of dollars in investment capital. The program is simultaneously gaining widespread interest Annual Reand acceptance among American business owners and developers, and projects ranging from huge real estate deals to fast-food franchises to mom-and-pop businesses are now seeking EB-5 money.
These EB-5 investor visas are authorized by USCIS in addition to traditional visa tracks and quotas, and allow the foreign investors to buy their way into permanent residence for themselves and their immediate family. However, the job creation requirement (10 full-time positions within 2 years) and other visa conditions must be strictly followed, or the foreign investors can lose their investment and their visas and be forced to return to their home countries!