Chinese experts welcome eb-5 visa reforms
Photo: Fifth World Art
Chinese property investment experts have welcomed the proposed reform of the USA's EB-5 visa.
The EB-5 offers residency to foreign investors who spend at least $500,000 in US real estate and create 10 jobs in the country, but caps the number of visas issued each year at 10,000. Last year, it reached that limit for the first time - then did the same thing once again in April 2015. The sell-outs were attributed to a wave of applications from wealthy Chinese buyers.
The proposed changes would see the threshold increased to $800,000 for rural areas of the US, or those with high levels of unemployment, with a further 1,000 visas made available every year for such places.
Simon Henry, Co-CEO of Chinese portal Juwai.com, supports the reform, which he says will "simplify and increase transparency" and "better track and guide successes to the benefit of the nation".
He adds that the benefits are often unnoticed by Americans: "When successful participants in the EB-5 program obtain residency, known colloquially as a ‘green card’, they become immediately responsible for paying US taxation on worldwide income and assets. They must continue paying as long as they remain US legal permanent residents or citizens — even if they work and live in China."
Demand remains high on the site, with enquiries from Chinese buyers about EB-5 visas rising 400 per cent in the first eight months of 2015.
"The immigrant investors we work with generally are willing to invest a higher minimum amount in exchange for the greater oversight and transparency in the proposed reform," he tells OPP.Today.
"Chinese investor immigrants will respond positively to the elements of reform in the legislation that improve accountability, transparency and oversight. Potentially negative proposals, including a higher minimum investment of $800,000, are offset by the beneficial elements of the proposal."
Care must be taken, though, not to sap the overseas appeal altogether: Canada scrapped a similar investment visa scheme in recent years, over concerns that too many Chinese buyers were applying. Its reformed program has failed to gain any traction.
"Unwise changes made in the interest of reform could break the program by reducing the flow of attractive investment opportunities into the program, or by reducing the program’s appeal to overseas investors — especially those in mainland China who have most embraced it," warns a report by Juwai.com.