Investor Immigration for Beginners

Summary

China’s modernization and globalization has caused an increasing number of students to go abroad, seeking both education from foreign institutions and a greater understanding of the world. This short primer on the who and why of Chinese EB-5 investors will give you a better idea of what is causing EB-5's sudden influx of Chinese millionaires.

July 28, 2015


China’s modernization and globalization has caused an increasing number of students to go abroad, seeking both education from foreign institutions and a greater understanding of the world. These days, America, Britain, Canada and Australia have extraordinary numbers of Chinese students, oftentimes desiring to stay abroad after finishing their educations. As a result, investment immigration programs have become increasingly popular for Chinese families; however, rising demand has caused governments to raise thresholds and regulations for these programs. The U.S., for example, is expecting a large reform this winter as the EB-5 pilot program expires for the 8th time since it’s inception in 1991. Canada, Hong Kong, and Portugal, formerly popular programs, have all but ceased for varying reasons, whereas the required capital investments for both Britain and Australia have increased significantly.

Why are People Immigrating?

Education

Investor immigration programs can be helpful for staying in the U.S. after college, but that is only a small part of the story. The American education system lures many families to immigrate to the U.S., receiving free public schooling and preferential admission at many institutions. The American EB-5 program requires an at risk minimum capital investment of $500,000 for the duration of the immigration process, which is generally returned in four to five years. Four years at a U.S. private high school costs an average of $60,000, so Permanent Residency can save investors significant amounts of money, per child. Colleges are no exception, as public universities subsidize residents’ costs. UC Berkeley, for instance, costs an additional $100,000 over four years for non-residents.

Financial and Quality of Life Benefits

Financial benefits for Green Card holders reach beyond free primary school, free secondary school and reduced tuition at public institutions. U.S. schools and organizations have a plethora of financial aide programs and scholarships that are typically restricted to residents. These scholarships are awarded on a variety of bases, including scholastic, artistic, and athletic ability.

In addition to financial benefits, immigrants enjoy a number of advantages over international students and non-immigrant workers, including better access to jobs, healthcare, loans and mortgages, investment, and mobility. Most importantly for many immigrant families, Permanent Residents have greater access to educational institutions, including private colleges. Amherst College, a leading private liberal arts institution, accepted only 4% of international applicants, as opposed to a 16.5% acceptance rate for U.S. residents in 2015. Even UC-Berkeley, known for high international acceptance rates, accepts only 10% of international applications as opposed to nearly 20% of domestic applications. Most American universities limit their international students to 10% of the gross student population.

After graduation

After graduation, students are provided with a one-year period, called Optional Practical Training (OPT), which allows non-immigrants to practice the skills they learned in college if they can find a job opportunity. After OPT, options for staying in the U.S. are limited to going back to school, obtaining an increasingly elusive work visa, participating in investor immigration, and of course marrying a resident. Unfortunately, many employers aren’t willing to hire non-immigrants due to security constraints or the unreliability of the currently inadequate H-1B work visa program. Many recent college graduates cannot find qualifying employment opportunities, because the job has to be directly related to your field of study. In the case that non-immigrants do find a qualifying job, fewer than 30% of applicants are even awarded a work visa due to the H-1B cap random selection process, known by many as “the lottery.”

Lewis Laskin