Research by Astons, the international experts on real estate, residency and citizenship through investment, has shown that despite a slight annual resurgence, global investors continue to turn their back on the United States and the US EB-5 Program.
The US EB-5 Program allows investors and their spouses and any unmarried children under 21 to apply for lawful permanent resident status, as long as they make the required investment in a commercial enterprise in the United States, or if they plan to create and preserve 10 permanent full-time jobs for qualified US workers.
Congress created the EB-5 Program in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. The program proved incredibly popular amongst global investors, providing a quick and simple pathway to obtaining permanent residency in the land of opportunity, access to the world’s largest economy and a brighter future for immediate family members.
However, the research by Astons shows that just 829 applications were made to the EB-5 program in 2022. While this signalled a marginal 1.8% increase versus the previous year, it sits 81% below the total seen in 2020, prior to the inauguration of Joe Biden as the 46th president of the United States
But while President Biden’s changes to taxation policies may have spurred a dramatic reduction in high-net-worth individuals heading to America, the decline in investor appetite for the EB-5 program has been building for some time.
In the last 10 years, the number of applications for the EB-5 Program had been climbing, up 125% from 6,346 in 2013 to 14,298 in 2015.
Total applications remained above 14,000 in 2016, however, following the inauguration of Donald Trump in 2017, new rules regarding the EB-5 Program were implemented, increasing the investment amount from $1 million (US) to $1.8 million (US), and $500K (US) to $900K (US) in Targeted Employment Areas.
Following these changes, the total number of applications made to the EB-5 Program has declined every year, bar a minor resurgence in 2020 and the marginal increase seen in 2022.
Immigration Expert for Astons USA, Alena Lesina said, “The United States has long been the destination of choice for immigrants looking to carve a better life for themselves and the ability to achieve US citizenship via investment made America one of the premier destinations for HNW investors from around the world.
However, the appetite for investment via the US EB-5 Program has been in steady decline since an increase to the minimum required investment was implemented in 2017, but it’s fair to say that this decline has accelerated considerably in the last few years.
There is, of course, a pandemic element at play, but with application volumes increasing by just 1.8% on an annual basis, it’s clear that America’s numerous taxation policy changes and their impact on high-net- worth individuals has deterred a significant level of investment.
At the same time, the rapid emergence of Golden Visa and Golden Passport schemes within numerous other global nations now means that the land of opportunity for migrating high-net-worths is no longer restricted to one nation alone.
Not only are there numerous options that provide the prospect of a better life for their families, but many come with the additional benefit of tax incentives, not penalties.”