January 30, 2013
Drew Bernstein's Article "Is the EB-5 Program a Golden Ticket for Chinese Entrepreneurs?" Featured in the EB-5 Investment Report
Given the enormous dynamism of China’s economy, it may come as a surprise that a majority of the country’s wealthy citizens are considering seeking their fortunes elsewhere. Today, China is estimated to have over a million millionaires. A survey cited by the Wall Street Journal suggested that 60 percent of Chinese with over 10 million rmb in assets (about $1.6 million US) are thinking about or taking actions to emigrate overseas. Reports suggest that this trend has picked up in 2012 with the upcoming change in the senior leadership of the Chinese government and increasing levels of social unrest causing China’s business and professional elite to develop a “Plan B” in the event that conditions deteriorate.
Against this background, a little‐know U.S. government program to attract foreign investment through accelerated legal immigrant status has become increasingly popular with Chinese entrepreneurs and investors. The program, known as EB‐5 was first put in place by Congress in 1990, ironically intended for wealthy Hong Kong business owners who were seeking to leave in advance of the territory’s handover to Mainland China. The program grants a fast‐track green card and eligibility for citizenship to those who make an investment of at least $1 million in a project that creates or preserves at least 10 jobs in the U.S. Projects in depressed or rural areas require only a $500,000 investment. The U.S. allocates 10,000 EB5 visas per year for foreign nationals and their immediate family members (spouses and unmarried children under 21), although this number has yet to be fully utilized since the program began.
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