Junk rating sparks Green Card rush
TAKING THE GAP: UBER-RICH EXIT APPLICATIONS SPIKE SHARPLY
Applications by rich locals for US ‘investor visas’ doubled after Nenegate. Now, they’ve likely doubled.
High Net Worth (HNW) South Africans, in pursuit of alternative citizenship and residency, are forking out millions in job creation and investment initiatives abroad. And relocation agencies say the trend has sparked dramatically after the cabinet reshuffle and subsequent junk downgrade.
Strong demand
New United States Citizenship and Immigration Services (USCIS) data shows wealthy South Africans consistently rank among the top 15 investors by origin in pursuit of EB-5 visas.
South African filings for “immigrant investor” status more than doubled to 40 in 2015, with the applicants spending $20 million on creating about 400 jobs in the US.
To qualify for the EB-5 visa, which give green-card status, foreigners must invest $500 000 in businesses or real estate projects that employ ten, full-time American workers.
Although data is unavailable, it is likely the filing numbers doubled again in 2016, said LCR capital. The international private equity investment firm, which facilitates local applications, says political developments drive interest among HNW South Africans.
Following the junk downgrade, new enquiries are being made on a daily basis rather than weekly.
“It is an extremely niche market as individuals need a lot of money. Some of the enquiries are from people who want to relocate and some are just looking for a ‘plan B’ or to secure better education opportunities for their children,” said Douglas van der Merwe, LCR’s local representative.
The FeesMustFall protests and Nenegate also triggered interest, he said. Additionally, applicants cite BEE laws and glass ceilings in the corporate world as factors.
LIO Global’s Nadia Read Thaele also reported an increase in interest in citizenship by investment and second residency programmes following the cabinet reshuffle and credit ratings downgrades.
“This industry is based on public perception … Lately, politics has been driving interest. There was definitely a strong spike in interest after the cabinet reshuffle,” she said.
According to Thaele, most HNW individuals don’t necessarily want to leave South Africa but are seeking freedom – freedom of business travel for entrepreneurs and freedom to study abroad for their children.
She said that more than 80% of applications were for residency programmes in Malta and Antigua, which offer strong passports.
Malta requires an investment of €1 million. Antigua requires a $250 000 donation to the government or a $400 000 investment in real estate projects.
Portugal, Grenada
She said residency programmes in Portugal and Grenada are popular especially as the latter has signed an E-2 investor visa treaty with the US. This allows Grenada citizens to obtain US residency permits provided they operate businesses in the US.
In the US, the EB-5 visa programme is expected to be reviewed soon. Despite promises to clamp down on immigration, Van der Merwe said the EB-5 visa programme was likely to continue.