The US has seen the creation of tens of thousands of jobs in the past eight years as a direct result of the investment of over 20,000 Chinese nationals, with about 35,000 jobs created by Chinese investment in fiscal year 2012 itself.
Reports suggest that over half a million Chinese millionaires plan to leave their country in the next five years, which would indicate that the influx of Chinese investment in the US will continue to grow. However, US immigration policy may put a curb to it, causing the Chinese to turn to Australia and the UK, two countries that have been making efforts to capture a greater portion of Chinese investment by revising their investment immigration policies.
In fiscal years 2012 and 2013, the US saw the arrival of 11,933 Chinese immigrants under the EB-5 program, as opposed to the few hundred going to the UK and Australia. But for fiscal 2014, the US Citizenship and Immigration Service (USCIS) has already announced that the number of Chinese investor immigrants had exceeded the EB-5 program’s quota, the first time that a quota had been exceeded in the 24 year history of the program. American officials expect 2015 to bring with it certain restrictions on the EB-5 program in spite of the benefits of the Chinese investment.
“In the last three years, the number of EB-5 applications from Chinese investors has exploded and reached the ceiling. Thus, this announcement from USCIS. I’m betting that the freeze on EB-5 applications available to Chinese investors will soon be accompanied by lengthy delays in visas already in the pipeline,” says investment immigration expert Andy J. Semotiuk of Forbes magazine.
The EB-5 program was launched in 1990 to promote the immigration of people who could invest in the US to improve its economy. Under the scheme, any foreign national who can create or preserve 10 or more full-time jobs in the US by investing a minimum of $1,000,000 or at least $500,000 in a high-unemployment area, can get a green card that will give him/her permanent residency in the US.
According to the Association to Invest in the USA (IIUSA), The EB-5 program has generated more than $6.5 billion in capital investment and created/supported more than 131,000 jobs since 2005. In 2012 alone, the GDP in the US was boosted by $3.39 billion through immigration investment, leading to creation of about 42,000 jobs. The program is responsible for a 130-company commercial project in Philadelphia employing 10,000 people; an airport and distribution center in South California; a ski-resort in Vermont, a hotel with 100,000 guests per year in Seattle; and a senior citizens’ community in Washington.
Chinese investor immigrants have been responsible for most of the investments and jobs over the last few years. Between 2006 and 2011, about 12,303 investor visas were issued by the US, of which 50% were granted to Chinese investors, 21% to South Koreans, 5% to the British, 4% to Taiwanese and 2% to Iranians. The percentage of Chinese immigrants has further increased in the last three years. In 2013, out of the 7,312 visas issued by the State Department, 85.5% of them (6,250) were granted to Chinese investors.
Now, however, the US decision to impose a quota on the number of Chinese investors has provided other countries with an opportunity to attract Chinese investment to their doors.
Australia and the UK are currently in pole position in the race to benefit from this US decision, especially since Canada discontinued its investor visa program in February this year. Canada’s program was popular among Chinese investors, who made up 75% of their applicants.
Australia started its investor immigration program in 2012 and ever since has granted 386 visas leading to permanent residency in return for a minimum investment of $5 million. According to government reports, 87.6% of the visas were given to Chinese investors. The program was successful in increasing foreign investment in real estate by 93%.
The UK also revised its investment immigration program in June this year to encourage more Chinese investment. The program, called the Tier 1 Investor Program, requires a minimum investment of £1 million ($1.65 million). The investors need not create any new jobs in the country and can get residency within six months.
Besides Australia and the UK, there are numerous other countries making efforts to woo wealthy Chinese nationals. Excluding EU countries, currently there are about 37 countries in the world that offer investor visas of some kind. In the European Union, the following countries have an investor immigration program: Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Estonia, Finland, Great Britain, Greece, Hungary, Ireland, Latvia, Lithuania, Malta, Portugal, Slovakia, Spain, and Sweden.
According to law firm Bukh Global, the EU countries with the best investor immigration programs leading to citizenship are Cyprus, Belgium, Malta and Portugal. The minimum investment requirement for Belgium is €350,000; for Cyprus € 2.5 million; for Malta €1 million; and for Portugal €500,000.
In the Caribbean, the investor immigration programs are offered by Antiqua and Barbuda, Belize, Granada, Dominica, Panama, and Saint Kitts and Nevis. A minimum investment of $200,000 is needed for Antigua and Barbuda, while for Saint Kitts and Nevis it is $250,000.
The trends in investment immigration clearly point to the fact that the future of this investment depends on the decisions taken by tens of thousands of wealthy Chinese citizens. With so many options available to them, the US may clearly lose out on this opportunity unless it changes its decision for quotas on its EB-5 program.