U.S. and Global Residency by Investment
By Robert F. Loughran, Foster LLP
The United States is just one of many countries around the world that offers temporary or permanent residency on the basis of a substantial investment in the country.
Options exist to secure residency in most countries if job creation can be demonstrated. The U.S. residency by investment program, the EB-5 visa for Immigrant Investors, provides permanent residency (a “green card”) to foreign nationals who invest in a “new commercial enterprise” to create or maintain at least 10 full-time jobs over at least a two-year period. The current minimum investment amounts are $500,000 if the investment is made in a “Targeted Employment Area” or $1 million without such restrictions. This investment may be made directly or indirectly through a regional center.
Regional centers permit for the pooling of funds for a specific project, such as a nursing home or real estate development project, and afford certain benefits such as indirect job creation. Currently there are over 1,100 regional centers, and the process to be certified as a regional center has recently been under question due to its relative ease. Therefore, potential immigrant investors should be wary of the potential for fraud and mismanagement of funds by CIS “approved” regional centers. CIS approval is merely an immigration qualification and does not confirm financial oversight.
A number of “nonimmigrant” visa options for temporary residency may also be available in the U.S. through an investment narrowly tailored to the business often significantly less than the EB-5 requirements.
Similar investment-based residency programs outside of the U.S. require the mere placement of a certain amount of funds over a period of time in a local bank, as well as more commonly the investment in government bonds or in the local stock market for a specific period of time. The U.K. Tier 1 Investor Visa requires a minimum investment of £2,000,000 in U.K. government bonds or certain types of capital in active and trading U.K.-registered companies and requires the maintenance of this investment to maintain valid status. The investor may apply to “settle” and secure long-term immigration status after 2 years by investing £10 million or 3 years if investing £5 million.
Numerous options are also available to retired persons through demonstration of sufficient financial solvency with Mexico perhaps the most popular destination for U.S. nationals. As an example, Mexico offers permanent residence without an explicit age requirement to those who can show financial solvency sufficient to meet their minimum requirements through an established investment account or guaranteed monthly pension. A consular and in-country process would be required for this process, but this process may be completed within a matter of weeks. Although not the case in Mexico, the common downside to securing residency based on retirement in many countries is the grant of residency without work authorization.
It’s important to consider these options for residency by substantial investment as potential alternatives to the typical employment-based routes to secure residency. Generally speaking, it is difficult in the majority of jurisdictions to secure work authorization without a local entity acting as a sponsor. Certain countries such as Colombia have created a visa category, called the NE-1, for employees of companies seeking to engage in business development and setting up a new company preceding the company’s ability to sponsor a work permit. More common are the intra company transferee options available to managers, executives, and specialized knowledge employees of multinational companies. These statuses are typically tied to employment but in many cases may be extended to permanent residency or the equivalent after an initial period of temporary residency. In the unique circumstances that do not fit the mold, an individual seeking residency by substantial investment should review the amount of funds available to him for investment, preference for a passive or active investment, the level of tolerated risk, and as a threshold matter, whether a basis for residency may be pursued outside of investment.