EB5 Investors Magazine Volume 2 Issue 2 | Page 65

Passport-seeking investors have a lot of options when exploring the immigrant investor market. There is even an entire industry of wealth managers located in off-shore havens such as Jersey, or burgeoning financial centers such as Dubai, that are dedicated to helping investors passport-shop. The reasons for such shopping ventures are numerous; some investors seek respite from high-taxing economies, some from political tensions, and others for the economic and educational benefits provided by the host country, including visa-free access for international travel. While the U.S. EB-5 program faces competition from more affordable and more expensive programs alike, savvy investors are considering more than just the price tag. Further considerations include tax liability after relocating, the form of investment, the level of residency or citizenship, the waiting time required, language and cultural differences, and the presence of home country expatriates. Once all of the above issues are taken into account, just how appealing is the proposed adoptive country? In the face of the competitive advantages associated with each immigrant investor program, this article intends to explore some of the factors that individual investors consider while prioritizing their decision-making processes. What is the price of a new passport? When compared against other immigrant investor programs, EB-5 investments that fall within targeted employment areas, and thus only require a $500,000 investment, can be considered cheap. In contrast, the United Kingdom’s Tier 1 investment category requires an investment of at least £1 million in a mix of government-approved investment funds and money parked in a U.K.-regulated bank, and the country even offers investment opportunities at the £5 million and £10 million levels. Despite greater upfront costs however, the United Kingdom only taxes residents on the wealth contained within its borders, unlike U.S. permanent residents who are taxed on their global income. If, though, investors are looking for lower taxes, the £1 million investors might be better served investing in Hong Kong where the effective tax rates are as low as 15 percent and the investment requirement is HK$10 million. Investors must, of course, weigh their tax concerns against the value of public goods they expect to receive in the host country after all is said and done. For those investors willing to spend more cash, Singapore’s program requires $2 million in new (or existing) business or government pre-approved funds. Investors must also prove significant business and entrepreneurial experience as well as a history of high profitability stemming from previous investment forays, rendering the cost perhaps even higher. However, the effective tax rate of 20 percent is not something to frown at. Some even speculate that the reason Eduardo Saverin, co-founder of Facebook, renounced (or perhaps “un-friended”) his U.S. citizenship in favor of Singapore in 2012 was because of its low tax rates. Continued on page 64 While demand for the EB-5 program is at an all time high, especially after the government of Canada recently terminated both its federal immigrant investor and entrepreneur programs, it is important for EB-5 practitioners to take heed of the other competitive investor programs.1 At this time, outside of EB-5, the most popular immigrant investor programs are being offered by: Australia, the United Kingdom, New Zealand, Singapore, UAE, Portugal, Ireland, Greece, Cyprus, Spain, Austria, and the islands of Dominica, St. Kitts and Nevis, Antigua and Barbuda.2 1 Note, this article is not meant to be a comprehensive analysis of all the global investor programs; rather, it is focused on identifying common immigrant investor incentives that play a role in country shopping. 2 This is not an exhaustive list of immigrant investor programs. There are a number of other programs being offered by countries such as Latvia, Hungary, Bulgaria, Macedonia, etc. w w w. E B 5 I n v e s to r s . c o m 63