As we surpass the first 100 days of U.S President Donald Trump’s presidency, you could be forgiven for thinking his first three months have been both tumultuous and contentious.
Despite this, foreign investors have not been put off as the demand for U.S. EB-5 visas – or investment visas as they are otherwise known – has soared, particularly among high net worth investors in emerging markets like China, Vietnam, and here in South Africa. Indeed, according to information released by the United States Citizenship and Immigration Services (USCIS), which administers the EB-5 visa programme, demand for the US citizenship scheme from South Africans has more than doubled since 2014.
The EB-5 investor visa allows visa holders to obtain a green card for themselves and their immediate family members by investing at least $500,000 (about *R6.6 million) into U.S. businesses – provided they create a required number of jobs. It’s a great ‘Plan B’ for local investors in these uncertain and chaotic political climes.
While 2016 figures are not yet available, there were 40 applications made by South Africans in 2015; more than double the 18 applications in 2014. And, based on the interest we’ve received at LCR Capital, we expect this figure will double again in 2016.
South Africans are not the only ones getting in on the act. The highest demand for EB-5 visas currently comes from China, with 13, 530 applications in 2015. This is followed by Vietnam (289), India (239) and Brazil (229). Growth in Brazil was fastest, at over 300%; and both Brazil and India are expected to meet the country cap of 700 visas by 2018.
It’s no surprise that negative political developments at home drive demand for obtaining citizenship in other countries among South Africans. This year has seen its fair share of bad news politically and economically; with the axing of Pravin Gordhan and other key Ministers and officials in the cabinet reshuffle and the downgrade of South Africa to junk status by two ratings agencies (Standard & Poor’s and Fitch). We have yet to see whether Moody’s will follow suit and downgrade us too.
While the rand has again strengthened since these developments, having a backup plan or at the very least, another way to diversify investments is never a bad idea.
The EB-5 visa initiative can offer investors and their families with some comfort – providing further options for families to obtain American green cards by investing in U.S. projects that create jobs in the U.S. Children will also benefit by being able to enroll into top educational institutions in America such as Harvard, Stanford and MIT.
If you are sitting on the fence when it comes to whether to invest, or not, now would be a good time to do so as the Rand is again strong and it would also prevent you from having to chip in more should the EB-5investment amount increase, as is currently expected on or before September 30th.
If you haven’t already invested any money offshore, the EB-5 investment programme offered by LCR Capital may also be the answer to your offshore diversification needs. And if you’re concerned about the future stability of the economy in South Africa, the U.S. visa programme could provide you and your family with the security and options you’ll need in times of uncertainty.
*Correct as at 10 May 2017