Migrating via investment: why US is inferior to Canada, UK, others
16 June 2018
The US EB-5 Investor programme or ‘million-dollar green card programme’ requires you to tie up around $575,000 of funds for a long period with no guarantee of success; similar programmes in Canada, the UK or Europe have much less burdensome requirements and may make more sense, says Ajay Sharma, president of Abhinav Oursourcings
A number of investors seem to be lining up to capitalise on business opportunities in the US through the EB-5 Investor program, often referred to as the ‘million-dollar green card program’. Under this conditional visa category, you along with your spouse and unmarried children under 21 year of age are eligible to apply for a US green card. Those successful under the EB-5 fifth preference visa category will be granted a conditional permanent residence status that is valid for two years.
To put it simply, the EB-5 is a paid green card visa category, where an investor is likely to create a minimum of 10 jobs by investing at least $500,000 through a regional center for two years, which is also the conditional permanent residence (PR) validity. The overall expected cost along with the investment and processing fee may come to a total of $575,000.
EB-5 vs global investor programs
On a global scale, one may find a pool of opportunities to migrate through investment, which will be much more attractive than the EB-5 because of cost, processing time and the associated risk. As a global investor, it is important to compare the EB-5 to other countries’ competing investor programmes, not only to note the required investment amount but also to know key factors for time and investment risks.
Migrating through EB-5 vs migrating to Canada via entrepreneur route
Investors who would qualify for Canada’s investor immigration programs would generally obtain an unconditional Canadian residential status for themselves and their dependents. Also, one needs to make the investment only after the Quebec government clears the application. In case of EB-5 green card program, one must make the entire investment and expense at the time of filing the application. And the entire amount stays blocked irrespective of how long the processing takes — it may happen that the investment may mature for refund while the application is yet to be approved! There is no such risk in case of Canada IIP (immigrant investor program)
Canada’s immigrant investor knows that if he qualifies, he qualifies for good. That is not the case with the EB-5 program. According to a Chinese investor, “Today, we can expect the EB-5 visa process to take eight years or even longer, and even after enduring the multi-year, opaque, bureaucratic application process, an EB-5 investor must risk losing residency status if the required jobs are not created within a specified window of time.
That is one of the pitfalls of the million-dollar green card program, as people would not want themselves and family to be subject to eight years of uncertainty for securing a new life, putting at risk their children’s educational plans, their joint career goals. Indians will in general need to wait for 2-3 years for the complete process to be over under the EB-5 green card program.
Another reservation with the EB-5 program is that the investment made by the prospective immigrant is under the control of the regional center. He has no control over the usage and application of his funds. Safety and return on investment – both are at risk.
In case of Canada IIP, one knows the fixed cost of acquiring the resident visa and after landing one can invest the funds in one’s own business or enterprise and manage it.
Then there are entrepreneur immigrant programs offered by various provinces in Canada. While most of them are conditional, they have the advantage of almost negligible investment and quick processing times with minimum local hiring requirements. What is more, one is required to make the investment only post visa and landing in Canada and gets to manage his own funds.
Canada also has an advantage of permitting children up to 22 years to go as dependents and even older if they continue to be financially dependent on parents and full-time students.
The EB-5 and the Bulgaria Investor Immigration Program
An ideal gateway into the European economy, Bulgaria boasts a diverse culture, moderate climate and perfect location for travel and work in and around the continent. Bulgaria’s Citizenship by Investment Program helps you attain the residency within 6 to 9 months with an easy option for citizenship within 18-24 years. There is no restriction as investments are preapproved by government (with financing options available from banks) and there’s no requirement for language skills. The best thing for an immigrant is that he / she does not even have to worry about relinquishing their nationality. As a Bulgarian citizen you have every right to live, work and study in any of the 27 EU countries, including Switzerland and Norway due to the bilateral agreements with the EU. One also has the advantage of including dependent parents and non-dependent children and siblings in the application.
How UK Tier-1 visa triumphs over the EB-5
In contrast to the EB-5, the UK offers two Tier-1 visas - Entrepreneur Visa and Investor Visa – and these visa categories are very easy to understand, with less investment risks. Tier-1 Entrepreneur programme entails an investment of only £200,000, which is 40 per cent less than the requirement for the EB-5. The job creation requirement lets you to invest in virtually any business and is limited to two employees. An investor can obtain a UK visa under either of its Tier-1 entrepreneur programmes within 8-16 weeks, eventually leading to permanent residency status after 5 years, whereas the EB-5 requires several years to complete.
The US requires EB-5 investors to bet both a significant investment of capital and their family’s residency status on whether their investment will result in a significant amount of verified job creation in a narrow window of time. This risk is enormous compared to any other programme in the world.
It is critical for US policymakers to keep these competitive realities in mind as they increase – intentionally or unintentionally – the cost, time and risk associated with EB-5 investments.
Based on the above we see that the EB-5 may be a great option for you but the risks associated with it are also great. Canada, Bulgaria, and the UK’s programmes leave give a much broader canvas for one to paint life’s success. Make a wise decision as per your specific needs, family and business situation. Whether it is the USA, Canada, the UK or Europe, make the right choice after considering all above factors.