Avoiding the Immigration Backlog
The ever-growing EB-5 waitlist means investors are looking into different options.
One solution involves obtaining citizenship in Grenada, followed by applying
for an E-2 investor work visa for the United States, writes H. Ronald Klasko.
The US offers both visa and permanent residence opportunities for foreign investors. It does not offer a direct citizenship route. The investor visa is the E-2 treaty investor visa. This is a 5-year (or shorter in some countries depending upon reciprocity schedules) indefinitely renewable visa, which allows the investor and his or her spouse and children to spend as much or as little time in the US as they wish. Depending on the amount of time spent in the US, they may be able to avoid taxation on worldwide income. It is available only to citizens of countries with bilateral investment treaties with the US. The amount of investment is non-quantifiable. Rather, it must be a “substantial” investment, which is generally defined as a sufficient investment for the specific type of business to be successful. Generally, if the investment amount is lower, for example, $100,000 to $200,000, the percentage of the total investment should be higher and close to or near 100%. If the investment amount is significantly higher, the percentage of the total investment may be lower.
The permanent residence option for foreign investors is EB-5. The big news in EB-5 is that there is no news. Most observers expected major new EB-5 legislation, but it failed to materialise. The good news for investors is that the investment amount (in most cases $500,000), which was implemented in 1990, remains the same in 2018.
The bad news is that the programme is suffering from its popularity. Because it is limited to 10,000 investors and their family members (about 3,000 investors) per year and because there are per country limits, investors from China now have a waiting list in excess of 10 years, investors from Vietnam for the first time have a waiting list and waiting lists are anticipated to commence within the next year for India, Brazil and Korea. No legislative relief is expected to deal with the quota backlog.
The Rise of the E-2 Visa
Partly as a result of these extended waiting periods, the E-2 visa has generated increased interest. Significantly, all of the countries that either have EB-5 quota backlogs or are expected to have EB-5 quota backlogs do not have bilateral investment treaties with the US, with the exception of Korea. This has resulted in a substantial increase in the volume of citizenship by investment applications in other countries. Grenada is the only country that has both a citizenship by investment programme and a bilateral investment treaty with the US. Once becoming a citizen, the new Grenada citizen is eligible to apply for an E-2 visa. Citizens of countries like China, Vietnam, India and Brazil are increasingly availing themselves of this option – in some cases instead of EB-5, and in other cases to fill the gap until the EB-5 green card is available.
Source: IM Yearbook 2018/2019