Three major players in the immigrant-investor field — Canada, China, and the United Kingdom — have all made major moves to kill, limit, or increase the price of these programs, while the Obama administration continues to promote the EB-5 program in its current form.
To the best of my knowledge, the three nations did not coordinate these moves and I have seen no other writer link the three nations' positions on these programs, but they all are certainly in sharp contrast to the Obama administration's mindless cheerleading.
Canada is simply killing its immigration investor program as it killed an immigrant entrepreneur program earlier on the grounds, among others, that "there is also little evidence that immigrant investors as a class are maintaining ties to Canada or making a positive economic contribution", according to CNNMoney. That's a quotation from the government's 2014 budget proposal.
In the UK, the Migration Advisory Committee (MAC), a well-regarded independent government agency, has told the coalition government that if the program is to be continued, it should bring in much more money and that some of the investor visas should be auctioned off to the highest bidder with the lowest acceptable bid (i.e., reserve price) set at 2.5 million pounds.
That suggested figure equals about $4,050,000 at current exchange rates. That is more than eight times as much as the minimum investment that is allowed under the EB-5 visa, and that ultimately produces in the United States a bunch of green cards for the investor, the investor's spouse, and all their children under 21.
While Canada, the UK, Australia, New Zealand, Portugal, and many other nations have traded visas of various kinds for aliens' investments, China is in the opposite situation; it is her citizens who are likely to want to invest in other nations (to get visas) and China is apparently worried about both the outflow of money and how — in its eyes — some of its people are being fleeced by crooked middlemen in the American program.
China, as we reported in a blog last month, has issued stringent new limitations on the sale of EB-5 visas in that country. The fact that more than a hundred of its rich families were taken in by a well-publicized, phony EB-5 scheme in Chicago may have set this in motion, a scam described in another CIS report.
The Canadian government is closing the federal immigrant investor program, but leaving in place the much smaller program for Quebec. This is an odd arrangement because that program brings interest-free loans to the provincial government there, but allows the investors to settle — as they often do — in Vancouver. So British Columbia gets the extra population, and the related costs, and Quebec gets the interest-free loans — you can image how BC feels about that!
The most impressive of these moves, in my eyes, is the position taken by the UK's MAC, a remarkable entity in the immigration policy business. That organization, which has a relatively tiny staff, has just published a comprehensive, 104-page study titled "Tier 1 (Investor) route: investment thresholds and economic benefits".
This is a clear-eyed document, apparently not tilted by the narrow economic interests that would likely dominate or at least blur a similar U.S. government document. In it, MAC Chairman Professor Sir David Metcalf CBE, who is associated with the London School of Economics, makes the fundamental point about the program that:
Most [aliens] invest in gilts [government bonds] — they loan the UK 1 million pounds for five years. But we do not need such investments to fund the deficit. We are selling around 300 million pounds of gilts every day — therefore the capital market is working very efficiently. Presently the annual aggregate loan via the investor route is equivalent to less than two days [per year] of our budget deficit.
Roughly the same thing can be said about the contribution made to additional foreign investment in the United States through the EB-5 route; it is minuscule.
Do the governments of the UK, Canada, and China know something America's does not about immigrant investor programs? Very likely.