Continued from page 65 and capital gains are not withdrawn, the investor can maintain residency in Hong Kong. In this model, however, even though the capital is safely parked away, the investor is precluded from drawing upon the funds. As such, the investor will need other sources of disposable income for his or her day-to-day living.
In a different model altogether, some countries realized that they would not only be able attract capital to their cash-strapped economies, but they could prop up their struggling housing markets by capitalizing on the real estate hunger of foreign investors( particularly those that hail from China). In return for a shot at residency, Greece asks investors to spend at least € 250,000 on property; the UAE requires at least $ 275,000 in property acquisition( though this investment form precludes the investor from being eligible to work in the UAE unless the investor opens a business in Dubai’ s free trade zone); Cyprus requires at least a € 300,000 property acquisition; both the island federations of St. Kitts & Nevis and Antigua & Barbuda permit $ 400,000 property acquisitions; while Portugal and Spain require at least € 500,000 in property acquisitions to qualify for their respective programs. Even if the value of the real estate declines because of an economic slump, the investor is not unfavorably penalized as compared with certain job creating programs that may lose the required job numbers.
Residency or passport? And how long will it take?
Aside from cost considerations, a rather important factor relates to the length of time it takes for the investor to see the fruits of his or her investment. An increasingly common complaint voiced by EB-5 investors stems from USCIS’ s processing times and the extended period that investors must wait to be granted permanent residency. Yet, the practice of first granting temporary / conditional residency for a few years prior to authorizing permanent residency and / or citizenship is quite common. The average length of time for this transition ranges between two to seven years, worldwide. As such, the United States’ transition period is competitively attractive.
On the other hand, there are a handful of countries that allow investors to purchase fast-track options. For example, the United Kingdom and Bulgaria allow a shorter permanent residence to citizenship period with a greater investment amount.
There are even some investment programs that lead to direct citizenship. Malta’ s € 500,000 investment( into a combination of property and bonds) allows full citizenship after the application is processed. Austria’ s much heftier € 2 million charity donation or € 10 million investment similarly provides direct citizenship. The same holds true for islands of Antigua & Barbuda, Dominica, Grenada, and St. Kitts & Nevis. Using these latter models, the investor is theoretically able to“ buy” a passport.
Cultural integration
The issue of physical presence and integration is a rather tricky one. On the one hand, certain countries, such as Spain, require that the investor spend a significant amount of time each year within its borders. On the other hand, Portugal only requires that the investor spend 7-14 days a year in the country( depending on the residency year in question), but requires a minimum comprehension of the language prior to applying for citizenship.
For example, one of the largest groups of prospective immigrant investors searching for new homes hails from China. While this group does prize real estate and economic opportunities, policies that require integration or the lack of an existing Chinese population in the relevant host country could be a deterrent. Immigrants, after settling in a new country, commonly yearn for some cultural familiarity; language, culture, food, and other familiar vestiges are prized. If language skills and cultural assimilation are required by a host country, it could whittle down the group of those able or willing to meet the relevant standards. Furthermore, it could turn into a deterrent to even those investors that are able to meet such requirements if eligible investors are interested in a large expatriate community. Essentially, the effect of deterring a small portion of the group could theoretically alienate almost the whole lot.
Ultimately, just how appealing is the host country?
At the end of the day, once an investor categorizes the most important factors, each program is compared against the overall economic and cultural appeal of the relevant country. The United States has always been synonymous with the American Dream and has generally been one of the most attractive destinations. This holds particularly true in light of the shuttered Canadian program. However, with the rise of competing investor programs and the looming Chinese quota retrogression that is predicted to hit within the next fiscal year, the EB-5 program will face some market challenges. While the program does not have a gloomy forecast, EB-5 practitioners should be aware that investors have a lot of options. As an advocacy goal, we should strive to make the program more attractive as opposed to encouraging increasingly onerous requirements. After all, in this business, the United States’ loss is another country’ s gain.
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Rohit Kapuria is an associate in the Philadelphia office of Klasko, Rulon, Stock & Seltzer, LLP and a member of the firm’ s EB-5 practice. He currently represents developers and foreign investors under the EB-5 program. Prior to entering the legal field, Rohit worked as an economist for a non-profit organization. He can be reached at rkapuria @
Rohit Kapuria klaskolaw. com.
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