ASIA NEWS NETWORK
WE KNOW ASIA BETTER
Chinese investors flood US visa scheme
Publication Date : 16-02-2014
On the website of The Trapp Family Lodge - a resort run by a descendant of the von Trapp family that inspired The Sound of Music - is a page that seems out of place for a Vermont ski lodge.
Alongside buttons for "trail conditions", "specials" and "brewery" is one called "EB5VISA". Visitors who click on it get an ad - in Chinese and English - inviting investors to sink money into the resort's expansion in exchange for a US green card.
Owner Johannes von Trapp is not the first to turn to wealthy Chinese instead of banks for funds. Hundreds of US businesses have sought to tap into growing interest from Chinese looking to take advantage of a programme that gives residency visas to foreigners who invest at least US$500,000 in the United States.
In the past few years - in line with growing Chinese wealth - a large number of wealthy Chinese have invested in US businesses to obtain the EB-5 visa. The Chinese made up about 80 per cent of the 8,564 EB-5 recipients last year and overtook the South Koreans as the dominant nationality applying for the visa in 2009.
Demand for the visa is so high now that the annual 10,000 cap could be reached this year for the first time since the programme was introduced in 1990. The authorities might have to impose a cut-off date for Chinese applicants as soon as July this year, which would mean a longer wait for those hoping to set foot in the US.
Already, EB-5 applicants must wait more than 18 months from the start of their application to the time they receive a conditional green card. Two years ago the wait was just six months, say lawyers. With this in mind, Chinese investors are scrambling to get their paperwork done.
Exclusive Visas founder Fred Burgess says his company's consultants and attorneys saw a 50 per cent increase in inquiries and applications in the first two months of this year compared with the same period last year.
Immigration lawyer Chuck Leamy, who has 22 years' experience in the field, says Chinese applicants "are rushing to get everything submitted so that they get a priority date and a place in the line".
Some lawyers are also advising clients to prepare their funds even before they find an investment project, just to speed up the process.
In particular, families with children approaching 21 are jumping into action, because a processing backlog could mean their children hit the age limit of 21 before they are able to obtain conditional permanent residency.
Apart from families, lawyers say another large group of applicants are young Chinese who are "gifted" a sum of money by their parents so they can apply for the EB-5 visa. This way, they need not obtain other forms of visa such as an employment visa, which would tie them to an employer.
According to a report released last week by the Association to Invest in the USA - a trade group that supports the investment scheme - the EB-5 programme brought in about US$1.8 billion during the 2011/2012 fiscal year and supported 33,134 American jobs.
Rei Teng, an associate attorney at the Immigration Law Group, says the visa is popular with the Chinese because it is the easiest to qualify for.
"There are no requirements regarding age, gender, degrees or experience," she says.
Shanghainese entrepreneur Lin Xiaosen, 37, who is considering the EB-5 visa, says: "Compared to other destinations, the investment amount (US$500,000) is competitive."
The rush for US visas will also be accelerated by the recent decision by the Canadian government to scrap its investor scheme, which was particularly popular with mainland Chinese and residents of Hong Kong.
Ronald Klasko, chairman of the EB-5 Committee of the American Immigration Lawyers Association, says he expects tens of thousands of these applicants to flood other investment-for-immigration programmes, including those in Spain, Australia and the US.
The Canadian government has also urged disappointed applicants to find other ways of getting into the country.
The scrapped programme will be replaced by a new Immigrant Investor Venture Capital Fund, which will require bigger investments from applicants.
Ironically, it was the popularity of the Canadian system that made Bill Stenger, chief executive of Jay Peak Resort in Vermont, consider the EB-5 programme as a source of funding for his hospitality business.
"We are so close to Canada, and I heard about the Canadian programme, so I looked into the EB-5 programme in 2006," he said.
Since then, his company has attracted 600 investors from 74 countries who have put US$275 million into his projects, which include resorts, food and beverage outlets and, most recently, a biomedical park.
His biggest investor markets are China and Britain.
Says Stenger: "We have a large market in China and backlog of the visa processing here will probably impact their interest in the US."