BizNews -- In recent years, acquiring an international visa has gained popularity among South Africans looking for a ‘Plan B’. Fuelled by ongoing political and economic uncertainty, being a ‘citizen of the world’ presents options and security, both for the primary visa holder as well as their families.
Portugal, Malta and Cyprus are among the common countries that attract South Africans to this type of global strategy. However, has grown significantly among South Africans recently, particularly those from Gauteng.
$500k investment remains in place until 8th December
Besides the obvious appeal of America’s status as the world’s no.1 economy, the EB5 investment visa is also relatively ‘cost-effective’ compared to citizenship by investment programmes in most European countries. In return for a $500k investment into the USA economy, investors can get a Green Card for themselves and their immediate family members within approximately 2 years. Within 5 years, or so, the $500k investment should be returned, with nominal interest, assuming the investment chosen is a good one.
The USCIS (United States Citizenship and Immigration Services), which launched the EB5 programme in the 1990s, has not increased the $500k investment amount in almost 30 years. However, a number of sources within Congress and the White House have hinted about hiking the fee to over $1-million. It’s widely agreed that an increase will happen, although the original 30th September 2017 deadline that was expected has been extended until 8th December 2017.
“This is a welcome extension as an increase in the investment amount would limit the number of South African families who’d be able to invest through the program. An increase to $1 million would exceed South Africans’ annual foreign investment allowance, making it harder to invest the funds offshore in the timelines required by the USCIS,” says Marc Sharpe, Partner & Managing Director of LCR Capital, a specialist EB5 provider in South Africa.
Growth in South African applications, mostly from Johannesburg
Latest stats show that 35 South African EB-5 investments were made in 2016, a growth of around 30% yoy. In 2017, Mr. Sharpe anticipates this number to double, based on the volume of enquiries LCR Capital has received in the past year.
“Since entering the local market in August 2016, we’ve received interest from over 250 investors for the EB5 visa. They’re a mix of demographics – both in terms of race and gender – although the majority come from Johannesburg,” says Mr. Sharpe.
This is supported by attendance at LCR’s EB5 seminars, which the firm holds on a quarterly basis. “Approximately 75% more investors attend the Jo’burg event than Cape Town,” he says. “Reasons for their interest? We hear about high crime rates, better education opportunities for children, the opportunity to start a business in America, or simply to emigrate, as the main drivers for people’s decisions.”
South Africans in the United States
Unofficial statistics suggest there are around 200,000+ South Africans living in America and high-density areas are the South, and South Eastern US. Yet setting up a new life in the USA isn’t always plain sailing as there are many unexpected cultural and administrative differences.
“The most common teething problems are buying a home, getting into schools, and setting up personal finances, learning business etiquette in the US and establishing a credit score,” says Dianne Stewart, Founder of PathWay USA, a concierge Immigration and Relocation Service, and ex-pat South African living in Charlotte, NC. Dianne assists many South Africans each year relocate as effortlessly as possible.
“The weather also plays a huge role. South Africans aren’t used to the extreme cold up north, so they gravitate towards the coast or warmer climates in the southern states of the US, where it’s also a cheaper cost of living. Choosing where to live, and then how to set up a home and business activities, takes time and immigrants benefit from hand-holding from someone experienced and on the ground,” says Stewart.
The Green Card lottery is among the most well-known U.S. visa routes, but with only 50 000 recipients each year, the odds of winning one are slight. For those who prefer not to rely on luck, and who have the financial means, the EB5 visa is a great option.
“EB5 is attractive to applicants who want a Green Card with a high degree of certainty in a short time frame. The applicant, along with their spouse and children up to the age of 21, should receive temporary Green Cards approximately 16 – 18 months after their initial application. The provisional Green Card allows you full rights to live and work in America, and after two years you can apply for a permanent green card,” says Mr. Sharpe.
Both LCR Capital and Pathway USA emphasise the necessity of doing background checks on Green Card and Immigration providers when engaging counsel. Increased demand from South Africans means there are now more options available, so it’s essential that investors do their homework, research the investment projects, understand the risks and timings, and appoint providers who are active on-the-ground with proven track records.
“The EB5 visa extension until 8th December gives South Africans more time to pursue an EB5 application. Together with PathWay USA and Wolfsdorf Rosenthal LLC Immigration Attorneys, LCR Capital will host free seminars in South Africa in Johannesburg (Oct 14th) and Cape Town (Oct 16th). Topics of discussion will be visa types and options, tax and legal issues, relocation and immigration support, timings and risks.”