News / Economy

    Foreign Investors Buy Their Way to US Citizenship

    The new SR 520 floating bridge takes shape next to the current bridge in Medina, Washington. Nearly 100 foreign investors, mostly from China, purchased municipal bonds in this project to qualify for U.S. green cards. (Photo courtesy WSDOT)
    The new SR 520 floating bridge takes shape next to the current bridge in Medina, Washington. Nearly 100 foreign investors, mostly from China, purchased municipal bonds in this project to qualify for U.S. green cards. (Photo courtesy WSDOT)
    Tom Banse
    An Idaho gold mine, a proposed wind farm in central Washington state, a new casino in Las Vegas and ski resort expansions in Vermont, all have one thing in common: they're investment vehicles for well-to-do families seeking U.S. green cards.

    Under U.S. immigration law, wealthy foreigners can get a green card by investing at least a half-million dollars to create at least 10 jobs in America.

    That looked like a good plan to Canadian Jordan Gagner. He and his wife had a problem a few years ago. They needed to relocate to a drier, desert climate. Something like Arizona. At first glance, the prospects for permanently relocating south of the border looked daunting.

    "Being a self-employed wealth manager and a teacher, those are two occupations that are not on the top 10 lists of visas being given to foreigners to come down to the U.S.," Gagner said. "Trying to get an executive visa of some sort would've been very hard to do."

    Path to citizenship

    But then Gagner discovered the immigrant investor visa shortcut. He and a number of other foreign investors chipped in $500,000 each to build an assisted living complex outside Bellingham, Washington. Gagner got credit for creating lots of construction jobs in the midst of the recent recession and the whole family received green cards.

    Immigrant investors seeking U.S. visas financed the construction of this office and retail complex called "Home Plate Center" across from Seattle's baseball stadium. (Photo by Tom Banse for VOA)Immigrant investors seeking U.S. visas financed the construction of this office and retail complex called "Home Plate Center" across from Seattle's baseball stadium. (Photo by Tom Banse for VOA)
    Bellingham immigration lawyer David Andersson orchestrated the deal. He's made a business out of bringing together developers who need low cost capital and prospective immigrants with money.

    "If you have a solid investment and there may be a benefit which exceeds mere return, such as the ability to move your family to America, then an investor may consider a lower return than, for example, a bank," he said.

    Andersson was a pioneer in an industry that he says is now experiencing amazing proliferation and growth. The matchmaking companies are officially known as "EB-5 regional centers," so named for the relevant provision of U.S. immigration law. Originally, these investment centers stuck to straightforward real estate deals. But now the options for wealthy, would-be immigrants are much more diverse.

    Gold mine

    More than 200 immigrant investors from China are financing the revival of 100-year-old gold mines in southwest Idaho. In a marketing video, a former executive of Gold Hill Reclamation and Mining describes how his company reprocesses leftover ore and mine tailings.

    A majority of immigrant investors come from China and prospective investors are asking more questions before signing up. This past winter, a Chicago hotel development that attracted backing from several hundred visa seekers was exposed as a fraud.

    Other Chinese investors demanded refunds from the organizer of a project tied to a new toll bridge between Seattle, Washington, and its eastern suburbs. They put money into state highway construction bonds, but then had to wait for an unusually long time - 20 months - to apply for their visas because of uncertainty over whether federal officials would approve the novel investment. “Novel” for EB-5 visa purposes, that is.

    Mike Mattox and his Lacey, Washington-based firm Access the USA organized that deal. He says, despite those complications, offering municipal bonds could be a game changer.

    "If the underwriting is in place, the relationship is in place," Mattox said. "If it is done correctly, it will be very successful. As far as marketing, this is what the market wants."

    The owner of a different immigration and economic development firm based in Lynnwood, Washington, thinks there's also a market for wind power investors. The firm invited well-off Koreans to back a proposed wind farm in central Washington state.

    But nearby landowner Harland Radomske fears a wind farm next door will reduce the value of his horse and cattle ranch. And that's not all.

    "What upsets me is also just the plain fact to realize we have all of this controversy going over immigration, the borders of Mexico, and all of that, issues before the Congress and Senate and so on," Radomske said. "And now we find out unbeknownst, if you’re a rich foreigner, you can buy your way to citizenship."

    The wind project developers declined multiple requests for an interview.

    Broad support

    Despite the general controversy over immigration, the foreign investor program has broad support in Congress. Legislation recently sent to the House by the U.S. Senate would make the program permanent.

    Attorney David Andersson acknowledges the visa program accounts for only a small fraction of direct foreign investment. But he says it brings favorable results.

    "In creating jobs in your neighborhood and in our state, the unemployment rate goes down," he said. "We have more taxpayers. Therefore, we can have more services. In other words, we have economic development."

    The immigrant investor program has an annual cap of 10,000 visas and had never come close to that number before. But the regional center industry group predicts investor visa applications could reach the cap next year.

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    Comments
         
    by: Nina from: Naples, FL
    August 27, 2013 10:48 AM
    What most people do not know is that there are thousands of foreign investors who purchase small businesses for less than $500K on the E2 visa. We create jobs for Americans, too, but we have no path to permanent residency (green cards) regardless of how long we are here or how may jobs we create. We must run our own businesses, unlike E-B5 investors, and must constantly renew our visas in our home countries at great expense. WE have to leave the U.S. every 2 years to keep our paperwork in status and we can never plan a future here.

    Foreign investors do nut just want to start new businesses, they want to start new lives, but that is only possible for the wealthy. Honest, hard-working people who contribute to the economy but cannot raise half a million are lest out in the cold.
    In Response

    by: tony from: d.c.
    August 28, 2013 9:32 AM
    Nina:

    What do you want the U.S. to do? Allow just anyone to come here? What's next, lowering the investment threshold to 200K, then 50K, then 5K? People are okay with status quo when things go well for them, and not so happy when it doesn't.

    The business your husband is running is just that- a business to benefit him and his family. In other words he's looking out for his own interests. Why shouldn't the U.S. also look out for its interests?

    I recommend to you and others: fix your country. The first step is to make your government officials acccountable. Being disinterested in fixing your community and preferring to just hop across the border isn't the answer.

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