More than 20,000 Chinese nationals have invested in the USA and created tens of thousands of jobs for Americans in the last eight years -- roughly 35,000 jobs in fiscal year 2012 alone.
The influx of investment and jobs could continue because about half of China's more than 1 million millionaires plan on leaving their homeland within the next five years, but American policy might put a ceiling on the economic benefits of Chinese investment immigration. In fact, Australia and Great Britain have been pushing to capture a significant portion of Chinese investment by changing their investment immigration policies.
The USA might need to change its Employment Based-5 (EB-5) program if it wants the overwhelming majority of Chinese millionaires who emigrate from China to continue to immigrate to the USA. In fiscal years 2012 and 2013, 11,933 Chinese nationals immigrated to the USA under the EB-5 program while only a few hundred immigrated to Australia and Great Britain, according to the three nations' governmental offices and nonprofit organizations that keep track of investment immigrants.
The trend of Chinese millionaires immigrating to the USA has been so strong that the U.S. Citizenship and Immigration Service (USCIS) announced on Aug. 23, 2014, that the number of Chinese investment immigrants had exceeded the EB-5 program's quota on Chinese nationals in fiscal year 2014. This was the first time in the 24-year history of the program that a quota had been exceeded. Fiscal 2014 is over, but American officials have predicted that there will be restrictions in 2015 as well despite the benefits of Chinese investment.
"In the last three years, the number of EB-5 applications from Chinese investors has exploded and reached the ceiling," wrote investment immigration expert Andy J. Semotiuk in Forbes magazine. "Thus, this announcement from USCIS. I'm betting that the freeze on EB-5 applications available to Chinese investors will soon be accompanied by lengthy delays in visas already in the pipeline."
The EB-5 program was established to encourage the immigration of foreigners who had the financial resources to improve the U.S. economy. Foreign nationals can obtain a green card that will allow them to reside in the USA permanently if they create or preserve 10 or more permanent full-time jobs for Americans via investing at least $1,000,000 in the nation or at least $500,000 in an area in the nation with high unemployment or a rural area.
The program was unsuccessful from its inception in 1990 until the USCIS began making the application process less onerous several years ago. Since fiscal year 2005, though, the EB-5 program has produced more than $6.5 billion in capital investment and created and supported more than 131,000 jobs, according to the Association to Invest In the USA (IIUSA). In fiscal 2012 alone, investment immigrants boosted the gross domestic product of the U.S. by $3.39 billion and increased U.S. employment by 42,000 jobs.
The IIUSA says the program is responsible for an airport and a distribution center in Southern California, a 130-company commercial project in Philadelphia that employs 10,000 people, a four-season ski resort in Vermont, a senior citizens community in Washington state, and a Seattle hotel that has more than 100,000 guests annually.
In the last few years, investor immigrants from China were responsible for most of the investments and jobs. From 2006 to 2011, the USA issued 12,303 visas, according to eb5investors.com. More than 50 percent of the investor immigrants were from China, about 21 percent were from South Korea, 5 percent were from Great Britain, 4 percent were from Taiwan, and 2 percent were from Iran.
In the last three years, the percentage of investment immigrants from China has dramatically increased, according to the U.S. State Department. In 2012, the State Department issued 6,678 visas with 5,683 of them, or 85.1 percent, being issued to Chinese nationals. South Koreans received the second most visas, 378, followed by Taiwan (123), Iran (76), Venezuela (48), and Great Britain (44).
In 2013, the State Department issued 7,312 visas with 6,250 of them, or 85.5 percent, being issued to Chinese nationals. South Koreans received the second most visas, 309, followed by Taiwan (113), Iran (82), Japan (70), Mexico (63), Great Britain (52) and Russia (39).
Challenges From Abroad
The U.S. decision to enforce the quota on Chinese investment immigrants has opened the door for other nations to boost Chinese investment in their nations.
Australia and Great Britain appear to be in the best position to benefit from the U.S. decision, particularly after Canada cancelled its investor visa program in February, 2014, because the program "had become an express lane for wealthy Chinese hoping to secure overseas residency," according to Forbes magazine. Roughly 75 percent of the program's applicants were Chinese nationals who would become Canadian residents by loaning 800,000 Canadian dollars (about $726,000 in U.S. currency) interest free to a Canadian province.
"Canada is missing out on Chinese millions after cancelling its initial investor visa programme," commented emigrate.co.uk.
Australia introduced its investor immigration program in 2012. Since then, the national government has issued 386 visas that lead to permanent residency in exchange for an investment of at least $5 million in the Aussie economy. The government reported in September, 2014, that 87.6 percent of the visas granted were to Chinese nationals. Hong Kong nationals were second at 3.1 percent followed by South Africa (1.6 percent), Japan (1.3 percent), and Malaysia (1.3 percent).
The program spurred a 93 percent increase in foreign investment in real estate, the Australian Financial Review reported.
Great Britain changed its rules on investment immigration in June, 2014, specifically to encourage Chinese investment in the nation, according to The Telegraph newspaper. The rules changes end the requirement that Chinese nationals who have already applied for a visa to the European Union also have to fill out a separate visa application with Great Britain. Previously, Chinese nationals found it easier to get a visa from other European nations.
The British investment immigration program, which is called the UK Tier 1 Investor Program, requires an investment of one million pounds, which is approximately equal to $1.65 million. Investors do not have to create any jobs and can obtain residency in the nation within six months.
Between June, 2013 and June, 2014, which is before the rules were liberalized, Great Britain accepted 770 investor visa applications, according to Migration Watch UK.
Numerous Other Investor Visa Programs
Australia and Great Britain might be in the best position to lure Chinese investors who otherwise would immigrate to the USA after the USA reached its quota and Canada decided to cancel its program, but numerous other nations could also be the destination for investor immigrants from China and elsewhere.
Investor Visa, in fact, lists 37 nations that offer some kind of investor visa program as well as the European Union. The European Union does not have an investor visa program per se, but Investor Visa reports that immigrating to one of the 28 nations in the union is "particularly enticing to foreign investors" because its "open door policy" makes it easy for non-Europeans who eventually become citizens of one European nation to live, relocate, study, travel and work in another European nation without a visa or work permit.
The European Union nations with investor immigration programs are Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Estonia, Finland, Great Britain, Greece, Hungary, Ireland, Latvia, Lithuania, Malta, Portugal, Slovakia, Spain, and Sweden.
Belgium, Cyprus, Malta, Portugal are listed by international residence law firm Bukh Global as among the best countries for citizenship for prospective investor immigrants. Belgium requires an investment of at least 350,000 euros; Cyprus requires an investment of at least 2.5 million euros; Malta requires about 1 million euros; and Portugal requires at least 500,000 euros.
In addition, Spain is an attractive option because it has a "bargain basement (investment) for residency visas," according to emigrate.co.uk.
Six nations that are in or border the Caribbean Sea offer programs for investor immigrants -- Antiqua & Barbuda, Belize, Dominica, Grenada, Panama, and St. Kitts & Nevis. Two of the nations are on Best Citizenships' list of "best for citizenship" nations. Antigua & Barbuda requires an investment of $200,000, while St. Kitts & Nevis requires an investment of $250,000.
Chinese nationals could also go to Hong Kong, which is an autonomous region of China itself.
The future of investment immigration in the near future is dependent mostly on the decisions of tens of thousands of wealthy Chinese nationals although it's certainly possible that wealthy people from nations like India and South Korea could become more interested in immigrating than they are now.
It will be interesting to see whether the USA changes its policy on quotas because of a falloff in investment by these wealthy Chinese nationals -- and whether other nations try to take advantage of this falloff by changing their policies.