Connecticut, US
The Canadian federal government’s recent announcement that it was terminating two key visa programs for immigrant investors has left many foreign investors with the need to explore other jurisdictions for immigration and investment opportunities. Along with recent improvements in the American EB-5 immigrant investor visa program, this development may help make the United States a more attractive destination for wealthy foreigner citizens with capital to invest.
Through Canada’s Federal Immigrant Investor Program (IIP), the federal government offered permanent residence to wealthy foreigners with a minimum net worth of CDN$1,600,000 (US$1,455,000) if the foreign citizen loaned the Canadian government CDN$800,000 (US$733,000) for three years. The Federal Entrepreneur Program (FEP) provided a pathway to permanent residence for certain applicants with demonstrated business experience, so long as they had a minimum net worth of CDN$300,000 (US$270,000), managed a qualifying business within three years of becoming a permanent resident, and created at least one full-time job for a Canadian citizen or permanent resident. The Canadian government has indicated that both programs provided limited economic benefits to Canada and that they will eventually be replaced by new, more focused pilot programs.* Nonetheless, the decision to terminate these programs—which have been suspended for some time in an effort to clear out lengthy processing backlogs—is a significant departure from the global trend of expanding and enhancing investor immigrant programs, including the U.S government’s recent initiatives and proposals to attract global talent and capital through a much improved EB-5 investor immigrant program.
The U.S. EB-5 program—which itself was temporarily suspended back in 1998 due to suspicions of fraud—has been significantly revamped and professionalized. The EB-5 program permits foreign citizens who invest as little as $500,000 and employ 10 U.S. workers in a rural or economically disadvantaged part of the United States to secure an immigrant visa, which can lead to a permanent green card after an initial two-year conditional period. The principal investor and immediate family members can live and work in the United States during that two-year period.
The EB-5 program is now being centralized at the Immigrant Investor Program Office located in Washington, D.C., where professional economists assist immigration examiners in adjudicating petitions, and where senior officers serve as case managers to “quarterback” the caseload. Additionally, one of the U.S. government’s new goals is to promote ongoing communication between EB-5 adjudicators and petitioners, or petitioners’ counsel, with the likelihood that all of a petitioner’s EB-5 filings will be handled by a single adjudicator. The U.S. government is also looking to implement an electronic filing process using an online application system that is capable of handling a large filing volume and multiple complex supporting documents.
Foreign investors have already taken note of the U.S. government’s increased enthusiasm and support of the EB-5 programs as a vehicle to improve the U.S. economy and job creation. The USCIS Ombudsman’s Office’s 2013 Annual Report stated that between FY2010 and FY2013, USCIS received nearly a 300% increase in I-526 filings (the initial and most difficult application in the two-step EB-5 application process), albeit with recent government delays in I-526 processing times. In short, the EB-5 program is an attractive alternative for sophisticated foreign investors seeking an investment program designed with a range of investment thresholds, clear and consistent administration, and pathways to permanent residence that reflect business realities.
A number of European countries have options for foreign investors, but most require higher upfront investments than the EB-5 program. For example, the United Kingdom offers permanent residence to persons who invest £1 million (nearly US$1.7 million), 75% of which must be in treasury bonds or other qualified investments, with the remainder in either qualified investments, real estate or in a local savings account—provided that program participants spend at least half the year in the United Kingdom. Conversely, other European countries severely affected by the Euro crisis, such as Spain, Portugal, and Cyprus, are offering residence, and in some cases eventually citizenship, to wealthy investors for as little as a €500,000 (US$680,000) investment in real estate. Malta, a member of the European Union, is even inviting qualified foreign investors and their family members to apply for Maltese citizenship after just 12 months of residence in Malta, in return for a total investment of €1.15 million (US$1.55 million). Of course, residency in one European jurisdiction can allow visa-free travel within the European Union, a significant benefit to many global immigrant investors. And citizenship in an EU member state affords complete freedom of movement within the European Union and the ability to live and work in any other EU member state.
Foreign investors—including those who were stuck in the Canadian backlog, and whose investments will now be refunded by the Canadian government—should consider the U.S. EB-5 program or one of the European options. In today’s highly competitive global economy it is imperative that countries design immigration programs that encourage job creation and economic growth through the encouragement of foreign investment. The Canadian government’s termination of its immigrant investor programs is an outlier in the global expansion of foreign investor programs, and applicants stuck in the backlog only need to look next door to find an attractive alternative.
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* Quebec has its own immigrant investor program that is unaffected by the Canadian federal government’s cancellation of the IIP and FEP programs, but the program is small, applies only to investments in the province of Quebec, and favors speakers of French.
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* Quebec has its own immigrant investor program that is unaffected by the Canadian federal government’s cancellation of the IIP and FEP programs, but the program is small, applies only to investments in the province of Quebec, and favors speakers of French.