US back on SA radars
South Africans take a fresh look at US migration options as the search for plan B continues
● In an increasingly volatile world, investing in alternative residence and citizenship programmes is becoming more common.
This is particularly true for South Africans looking for ways to protect their wealth from an ever-weakening rand and economic and political instability.
In fact, South Africa counts among the top 10 countries in terms of inquiries received by global migration specialists Henley & Partners in 2022.
The programmes offered by the Indian Ocean island of Mauritius, the Caribbean islands of St Kitts and Nevis, a number of European countries
notably Portugal, Malta and Montenegro and more recently the United Arab Emirates state of Dubai have become popular options.
In addition, the US is firmly back on South African radars after the five-year extension of the government’s EB-5 immigrant investor regional centre programme last year.
Stuart Ferguson, founder and CEO of South Africanbased EB-5 promoters American Dream, has helped many local families apply for green cards since 2010.
He says though there was talk of the US potentially shutting down its residency by investment programme when it lapsed in 2021, the EB-5 programme was reauthorised in March 2022.
The updated scheme allows foreign investors, their spouses and unmarried children under 21 to apply for permanent residence through the EB-5 investment visa programme.
To be illegible, EB-5 applicants must invest a minimum of $800,000 in approved real estate projects or other commercial enterprises in designated areas known as targeted employment areas across the US. The initial capital investment is typically returned to applicants after five to eight years.
Ferguson says various reforms were introduced to the legislation that regulates the EB-5 programme, which has created added protection and benefits for South Africans looking to relocate to the US.
Two key changes are the ability to concurrently file for an adjustment of status and the ability to file with a deferred payment and promissory note, which is proving to be appealing to South African investors.
“It typically took two years for an EB-5 investor to obtain approval, then they needed to complete a consular process, which can take a further six to eight months,” says Ferguson.
“It‘s now possible to concurrently file for an adjustment of status, which in some cases allows an EB-5 investor who has legitimately been in the US for 90 days to apply for work authorisation, which is currently taking between four and five months. This is a major dealchanger for South Africans, who have specific timeline requirements.”
Another key upshot of the amended legislation is that the EB-5 programme has been extended until 2027, he says.
Unlike most real estatelinked residence and citizenship programmes offered by EU countries, which don’t require physical relocation, the EB-5 visa is primarily a route to emigration.
However, it doesn’t mean everyone who applies for an EB-5 visa plans to physically leave South Africa, as applicants are allowed to retain their primary residence. There are certain criteria to maintain a US permanent residency.
Ferguson says there’s a big trend among affluent South Africans to obtain a green card via a capital investment to secure tertiary education opportunities for their children.
“Some parents, especially those running their own businesses in South Africa, opt to retain a home base here while their children relocate to the US to study.’’
Chris Immelman, MD of Pam Golding International, which has partnered with American Dream on EB-5 developments in the US, says it is likely to become more difficult for South Africans to emigrate as many countries face pressure to scrap their immigrant investor programmes.
Several EU opportunities are already closing, with Portugal’s golden visa programme potentially coming to an end later this year. “The relaunch of the EB-5 visa therefore offers a timely opportunity for South Africans looking to relocate to the US,” says Immelman.
American Dream and Pam Golding are marketing the remaining 30 investment slots still available in 1818 Park, a recently completed residential development in the south Florida coastal city of Hollywood.
The project comprises 273 apartments and a ground floor retail offering.
Immelman says Pam Golding International and American Dream will only partner with developers who have a proper track record.
“We ensure the underlying project in which we offer investment opportunities is credible and secure and offers a suitable risk profile to our South African clients.”
The capital requirement for 1818 Park is $800,000, plus a $50,000 administration fee. Typically, the capital is tied up in a project for about seven years and is linked to the applicant completing certain sustainment requirements.
Immelman says 1818 Park is close to 97% let at rentals that comfortably exceed initial projections in 2020. “So the capital risk is minimal given that the development is already completed and virtually fully let.”