Im­mi­grants eye US af­ter Canada change

China Daily (Canada) - - FRONT PAGE - By ZHAO YAN­RONG in Bei­jing and YU WEI in San Fran­cisco

Tens of thou­sands of Chi­nese in­vestors may have to find new des­ti­na­tions for their wealth af­ter the Cana­dian govern­ment an­nounced on Tues­day its in­ten­tion to end its im­mi­grant in­vestor pro­gram, and one of those des­ti­na­tions is likely to be the US, im­mi­gra­tion lawyers say.

The Cana­dian federal Im­mi­grant In­vestor Pro­gram pro­vided limited eco­nomic ben­e­fit to the coun­try, ac­cord­ing to a news re­lease on the web­site of the Cana­dian em­bassy in Bei­jing.

Re­search shows that im­mi­grant in­vestors pay less in taxes than other eco­nomic im­mi­grants, are less likely to stay in Canada over the medium- to long-term and of­ten lack the skills, in­clud­ing of­fi­cial lan­guage pro­fi­ciency, to in­te­grate as well as other im­mi­grants from the same coun­tries, ac­cord­ing to the re­lease.

“Our govern­ment is fo­cused on at­tract­ing ex­pe­ri­enced busi­ness people and rais­ing in­vest­ment cap­i­tal that will con­trib­ute to our eco­nomic suc­cess over the long term,” Ci­ti­zen­ship and Im­mi­gra­tion Min­is­ter Chris Alexan­der said.

The im­mi­grant in­vestor pro­gram, which granted per­ma­nent res­i­dency to those who com­mit­ted C$800,000 ($727,850) to a five-year zero-in­ter­est loan, was very pop­u­lar among wealthy Chi­nese people.

The pro­gram will be re­placed with a new Im­mi­grant In­vestor Ven­ture Cap­i­tal Fund, which will re­quire im­mi­grants to in­vest money, rather than just loan it.

Canada has been a pop­u­lar des­ti­na­tion for Chi­nese mi­grants since Ot­tawa opened its im­mi­gra­tion pol­icy to res­i­dents of the Chi­nese main­land in 1996. China has be­come the largest source of im­mi­grants and in­ter­na­tional stu­dents in Canada, ac­cord­ing to a re­port by the Cen­ter for China and Glob­al­iza­tion.

How­ever, Canada’s im­mi­gra­tion pol­icy changes may cause a lot of Chi­nese to lose their in­ter­est in the coun­try and force Chi­nese in­vestors to look for al­ter­na­tives, such as the US Em­ploy­ment Based Visa, Cat­e­gory 5 (EB-5) pro­gram — a way of ob­tain­ing a green card for for­eign na­tion­als who in­vest money in the US.

“I be­lieve that Chi­nese na­tion­als will have fewer choices to em­i­grate from China (be­cause of Canada’s chang­ing pol­icy) and that the US is a log­i­cal and de­sir­able des­ti­na­tion with a lower in­vest­ment thresh­old,” said Larry Be­har, im­mi­gra­tion at­tor­ney at Be­har Law Group.

With a min­i­mum in­vest­ment of $1 mil­lion or $500,000 in low em­ploy­ment or ru­ral ar­eas, an EB-5 pro­gram, grants spe­cial visas to for­eign­ers who cre­ate or pre­serve at least 10 full-time jobs for US cit­i­zens.

In 2009, China sur­passed South Korea to be­come the largest source of EB-5 par­tic­i­pants. More than 6,000 Chi­nese in­vestors ob­tained visas through the EB-5 pro­gram in fis­cal 2013, ac­cord­ing to Ron­ald Field­stone, at­tor­ney at Arn­stein & Lehr LLP.

“There is a pent-up de­mand for wealthy Chi­nese to em­i­grate to western coun­tries,” Field­stone said. “There­fore (be­cause of Canada’s new im­mi­gra­tion rule), these in­vestors will now ac­tively look to the well-es­tab­lished EB-5 pro­gram in the US for re­lief.”

Jean Chen, lead at­tor­ney at the law of­fice of Jean D. Chen, said she be­lieves there will con­tinue to be a large in­crease in the num­ber of Chi­nese in­vestors for the US EB-5 pro­gram.

“This is not only due to the Cana­dian sit­u­a­tion as you men­tioned, but also be­cause the US EB-5 sys­tem has lately had a very high ap­proval rate with a rel­a­tively low in­vest­ment thresh­old, so we see the pop­u­lar­ity in­creas­ing sig­nif­i­cantly,” Chen said.

How­ever, po­ten­tial Chi­nese in­vestors worry about the se­cu­rity of US in­vest­ment. Con­cern is es­pe­cially high af­ter last year’s “Chicago Scan­dal” in which the Se­cu­ri­ties and Ex­change Com­mis­sion sued an EB-5 re­gional cen­ter, ac­cus­ing its op­er­a­tor of de­fraud­ing more than 250 in­vestors pri­mar­ily from China out of $156 mil­lion.

“On a very ba­sic level, the US sys­tem has more risk in­volved when com­pared to the Cana­dian sys­tem,” Chen said. Con­tact writ­ers at zhaoy­an­rong@chi­nadaily.com.cn and yuwei12@chi­nadai­lyusa.com

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