What started as a simple idea over two years ago, has grown into a law that very well may be passed through the new Conservative leadership of Britain’s, Theresa May. The new Prime Minister of the UK has been insistent on passing “safeguards” that would allow children, once they turn 18 to delete any derogatory or incriminating former social media posts, photos, and even comments.
A successful Chinese entrepreneur, showed me a news article. It reported that wealthy Chinese could buy an American passport and become US citizens. Is this really true? What are the implications of this visa program?
The US Employment Based Fifth Preference (EB-5) program was established by the U.S. Congress in 1990, to link investment, employment and residency. Three years later, the program language was relaxed from “to create ten direct employment opportunities”, to “directly or indirectly create 10 job opportunities.” This is broad and flexible wording. It is designed for entrepreneurial and wealthy investors outside the US, who fund a new commercial enterprise of at least $500,000 for investments. Under the program, those entrepreneurs, their spouses and their unmarried children under 21 years old can apply for green cards permitting residency.The objective is to attract foreign investments to the U.S., and to stimulate economic development and job creation.
EB-5 demand has increased rapidly. In 2012, President Obama extended the program. In May of 2017, Congress extended the EB-5 Program until September 2017. There are many supporters.
In 2014, 10 thousand EB-5 petitions were filed with the United States Citizenship and Immigration Services (“USCIS”). Overall, 5,115 have been approved. Over $2.5 billion investments were attracted. An additional $6.2 billion are awaiting federal adjudication. EB-5 capital is also an attractive low cost funding tool for project developers in the U.S. It offers foreign investors a way to permanent residency that is not backlogged by other applications and does not require sponsorship by a US employer.
Throughout the world today, numerous programs like the EB-5 have been established. In Australia for example, foreign investors are granted the opportunity to immigrate, but only receive temporary residency for four years. An investment of AUD $1.5 million in an Australian company ( U.S $1.2 million) is required. France allows foreign investors to obtain residency for 10 years by making a “long term and non-speculative investment of at least € 10 million (U.S $11.8 million) in industrial or commercial assets.”
There is a standard moral objection to the EB-5 program: The United States should not be in the business of selling the right to live there. This claim suffers from a slight misunderstanding. In effect, the government gives the visas away — to profit-making businesses that have jumped through the program’s requisite bureaucratic hoops. Then the companies can solicit investment based on the promise of permanent residency. In spite of ten thousand slots a year, 40,000 investors still wait for a green card. Obviously investor needs have not been met.
Investment immigrants are in high supply. The U.S government should use the opportunity and open the gates to them. The U.S. has an immigration culture, with a spirit willing to absorb both elites and refugees of the world.
However, change must come; the program needs to be refined in terms of size of investment, number of jobs generated, industry direction, geographic location, and job recipients. I believe that the investment minimum should be $2.5 million, and the American job creation shall be at least 25. Then we can continue this program helping both investors and employees; a noble outcome!
Here you are, visiting the ever beautiful London, when you come across a shop with the most beautiful pair of shoes in the window. You notice they’re designer, vintage even, and in the perfect condition, and look, the price says £150. That’s reasonable you say, until you get to the counter to pay for the shoes, only for your mom to point out that £150, is actually $200 in U.S. dollars. This is called an “exchange rate”.
When were talking about trade, you’ll probably hear the words “investments”, “portfolios”, “capital”, “debit and credit”, and BOP (thats balance of payments). These words to global trade advisors and financial aficionados are like second nature, but to those just breaking into the world of International Business, they can be daunting words. Let’s use an example that will give you a visual picture of just how everything comes together to understand how countries measure international business activity, balance payments, and look at exchange rates and altered trade prices.
This past month, I had the great opportunity to travel to England, where I taught a seminar session on International Business in a Dynamic Environment in Canterbury. Over the course of four weeks we discussed the many different aspects of International Business with students, and the discussion proved to be both deep and mind opening.