After publishing a post last month about a new visa bill that targets high net worth foreign nationals, at least one of our readers was quick to express his distaste for the measure:
"This is a huge problem for EB-5 people! Please call or write your Senators and Congressmen and urge them to kill this bill immediately. It is a bank bailout at a time when we need jobs. Very, very problematic for EB-5!"
Is the risk the bill poses really so great? It certainly does provide an alternative route to living in the U.S. for some people who might otherwise want to utilize the EB-5 visa. And that is what has some EB-5 stakeholders a little worried.
The VISIT-USA bill, sponsored by Senators Schumer (D-NY) and Lee (R-UT), would provide tourist visas to foreign nationals who purchase a home for at least $500,000 in cash. The idea is that such an initiative would spur activity in the housing market, not to mention bring more money into the country generally.
But wouldn't would-be EB-5 investors just turn to one of these visas instead of investing in job-creating projects? It's a good question, but it's important to remember that this visa:
- doesn't offer a path to permanent residency;
- is only good for a limited period of time; and,
- doesn't allow recipients to work in the U.S.
And as a recent article in the South Florida Sun Sentinel notes, all of those things are "what many Chinese investors want." China, after all, would presumably be among the largest target markets (if not the largest) for such a visa.
It also looks like a provision in the bill would require visa holders to pay U.S. taxes on their global income. As attorney Larry Behar weighed in for the Sun Sentinel article, many Europeans and Latin Americans who already own property here don't stay year-round specifically because they don't want to be taxed like U.S. citizens. Needless to say, leaving that part of the bill intact might ensure that very few foreign nationals deign to utilize it.
Mo Abbas of the Gold Coast Florida Regional Center even suggested to the Sentinel that the bill would do little besides inflate home prices in some areas in order to attract buyers trying to meet the minimum purchase requirement ? a possibility lawmakers may need to consider before voting on the bill.
That the new visa would be at least somewhat of a distraction from the EB-5 program, which is a job creation solution and not a housing market stimulus, is probably true. How much of a distraction is unclear. The Sentinel mentions how one EB-5 regional center was set up to fund construction of the University of Miami's Life Science Technology Park, a project that demonstrates in a very visible way how EB-5 can create lasting benefits for communities. There's clearly concern that any amount of waning interest in the EB-5 program would be bad for projects like that one.
But a glorified tourist visa is still a far cry from a green card. Even if the bill does pass in its current form, the tax provision and the limits on how long visa holders can stay here might be enough to curb any interest from many would-be applicants.
Image credit: Deborah Wei