New World, New Policy: Entrepreneurial Money Produces Residency Permits

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!

Presentation of Chinese Scroll

Dr. Czinkota receives a scroll with a Chinese poem written in calligraphy from Professor Youhua Lou.

chinese scroll copy

Below is the poem and its English translation. The poem describes the beauties of the mountain village in the sunset that is clear after the rain and the pure-hearted personality of villagers. The poet focuses on landscapes to express his satisfaction as a recluse who was a person of unsullied character and pursued the ideal state.

山居秋暝
An Autumn Evening in the Mountains

 王维
Wang Wei

 空山新雨后,天气晚来秋。
After rain the empty mountain
Stands autumnal in the evening,

明月松间照,清泉石上流。
Moonlight in its groves of pine,
Stones of crystal in its brooks.

竹喧归浣女,莲动下渔舟。
Bamboos whisper of washer-girls bound home,
Lotus-leaves yield before a fisher-boat —

 随意春芳歇,王孙自可留。
The scents of spring may go; that’s Nature’s will.
This season here attracts the noble still.

 

Doing Business in Singapore

Singapore is a multicultural society with a population of about 4.5 million. Many ethnic groups are represented in its population, for example Chinese (76.8 percent), Malay (13.9 percent), and Indian (7.9 percent), and many languages are spoken, for example Mandarin (35 percent), English (23 percent), Malay (14.1 percent), Hokkien (11.4 percent), Cantonese (5.7 percent), and Teochew (4.9 percent).

Since its independence in 1965, Singapore has adopted four national languages, namely Mandarin, Malay, Tamil, and English. For business and politics, English is the language of choice. While Singapore claims to be an egalitarian society, Singaporeans retain strong hierarchical relationships that can be observed in the relationships between parents and children, teachers and students, and employers and employees. This reliance on hierarchy is drawn from Confucianism, which emphasizes respecting elders and status.

This cultural value translates to a more formal approach to business in Singapore than in many Western countries. Having “face” and giving “face” to others are important aspects of both social and business interactions in Singapore. As such, Singaporeans tend to be subtle, indirect, and implicit in their communications. They hint at a point rather than making a direct statement, since that might cause the other person to lose face. Rather than saying “no”, they might say “I will try.” This allows the person making the request to “save” face and thus maintains harmony in their relationship. Singapore has a group-oriented culture, so links are often based on ethnicity, education, or working for the same company. Most Singaporeans are soft-spoken and believe a calm demeanor is superior to a more aggressive style.

Punctuality is a virtue so you should arrive at meetings on time. Business cards are exchanged after the initial introductions. Business cards are exchanged using both hands. Examine business cards carefully before putting them in a business-card case. Treating business cards with respect is essential as this is a signal to Singaporeans as to how you will treat the relationship.

When business gifts are involved, there are a few things to note that depend very much on the ethnic group of the recipient. If the recipient is Chinese, one should avoid giving clocks as they are associated with death, and avoid wrapping gifts in white, blue, or black as these are mourning colors. If the recipient is Malay, so not give anything made of pigskin as Malays are Muslim; do not give alcohol; give halal goods only; and avoid white wrapping paper as it symbolizes death. Finally, if the recipient is an ethnic Indian, avoid giving bouquets that include frangipani as they are used in funeral wreaths; avoid wrapping gifts in white or black; and avoid giving leather products to a Hindu. In all cases, do not expect the recipient to open the gift when received as this is not courteous in Singapore’s culture. Likewise, do not open the gift received from a Singaporean in front of him or her unless you are asked to.

For more information, refer to Fundamentals of International Business: 1st Asia-Pacific edition by Michael Czinkota et al.