Millionaires flocking back to US: Why there is renewed demand for EB-5 visa

The UAE remains a top destination, but the US is attracting millionaires with its booming tech sector and Florida's allure for retirees. Canada emerges as a surprising competitor.

Even though the  United Arab Emirates remains the most attractive destination for the world's rich with its zero income tax, luxury lifestyle and "golden visas" for investors, America’s growing dominance of the global tech sector is a key factor in helping it to attract millionaires, along with the ongoing rise of Florida as one of the top retirement destinations for the world’s wealthy.

A new analysis by Henley & Partners shows that in 2024 the UAE will attract 6,700 millionaires while the US will see  millionaire migration of 3,800 high net worth individuals. Millionaires’ and ‘HNWIs’ refer to individuals with liquid investable wealth of USD 1 million or more.

 

USA is the world’s largest economy and remains the undisputed leader in terms of private wealth creation and accumulation, accounting for 32% of global liquid investable wealth — a colossal USD 67 trillion. America is also home to 37% of the world’s millionaires: some 5.5 million high-net-worth individuals with over USD 1 million in liquid investable assets are based there, and a net inflow of 3,800 more millionaires is projected for 2024. 

Many will relocate to the country by participating in the US EB-5 Immigrant Investor Program, as recent changes have resulted in reduced waiting times and increased security for applicants, leading to renewed demand, noted Henley & Partners in a report. 

"Against a backdrop of economic instability, ongoing conflicts in Ukraine and the Middle East and increasing divisions in societies around the globe, we’re experiencing an era of extreme uncertainty. Mindful of the dangers, many wealthy individuals are seeking to acquire residence rights in other countries to reduce the risk they are exposed to. Countries across the globe are seeing some of their wealthiest citizens leave in search of stability, security, and better opportunities elsewhere. One of the most popular countries for migrating millionaires and their families is the USA," said Dmytro Chernega, IMCM, a Private Client Advisor.

The US also took the second place in the Henley Opportunity Index, a benchmarking tool that quantifies the impact and probability of success that a top education coupled with additional residence rights and/or alternative citizenships acquired through investment migration can have on preserving and growing multi-generational wealth. 

According to the June 2024 Henley Opportunity Index, the USA has a total opportunity score of 82%, performing particularly well in terms of earning potential, top-tier employment prospects, and career advancement, and second only to the UK in terms of premium education.

From a practical perspective, a US passport is very useful for investors who eventually gain US citizenship, which is possible after five years of legal residence. It provides considerable economic mobility, with a passport power score of 73.7% — in other words, it provides visa-free access to 188 destinations that represent 73.7% of the world’s GDP. Far more than a travel document that defines your freedom of movement, a US passport provides significant financial freedoms in terms of international investment and business opportunities.

US EB-5 Immigrant Investor Program

The US EB-5 Immigrant Investor Program was created in 1990 and first launched as a pilot in 1992,  to boost the US economy through job creation and capital investment by foreign investors. The program has undergone several reforms in the intervening years, the most recent of which was in 2022, when US President Joe Biden signed the EB-5 Reform and Integrity Act, making significant improvements.

 For example, it set up an EB-5 Integrity Fund to detect and investigate fraud and ensure compliance with immigration laws; it enables investors who are already in the USA to apply for permanent resident status  while their EB-5 application is pending, helping them to obtain work and travel permits more quickly; and it provides stronger investor protections.

The program is now prioritizing investments in areas with high unemployment — targeted employment areas (TEAs) — and setting aside specific visas every year for investors in these regions. There are also clauses in place to make sure investors who applied for a permit before the rules changed are still eligible and not disadvantaged by the changes. 

"The result of the program reforms has been a resurgence in demand, with significantly more applications being processed, and more being approved. The reserved visas for TEAs have been particularly beneficial in terms of helping Chinese and Indian investors to immigrate more quickly and backlogs for applicants from countries such as China, India, and Vietnam are clearing up. According to Invest in the USA’s EB-5 Data Dashboard, since 2000, almost 123,000 qualified investors and their family members have obtained legal permanent residence in the USA via the program, and in 2024 YTD almost 6,000 EB-5 visas have been issued," said Chernega.

The program requirements

The US EB-5 Immigrant Investor Program requires an applicant to invest at least $ 800,000 in a TEA project (rising to $ 1,050,000 for non-TEA projects) as well as create or preserve 10 permanent full-time jobs for qualified American workers. They must also provide proof that their funds come from legal sources. Successful applicants’ spouses and unmarried children under 21 years of age can join them for no additional investment.

After the successful applicants have received a green card, the funds must stay invested for three to seven years depending on the project.

Approved applicants will receive conditional green cards for a period of two years. The conditions on the green card are then removed at the end of the two years upon demonstrating to USA immigration authorities that the jobs were in fact created or maintained. The transition from conditional to regular green card does not affect what the green card holder can do in the USA.

On average, applicants receive their initial conditional green cards after between 12 and 36 months. They can apply for this to be converted into a regular green card two years later. 

To be eligible for citizenship, green card holders must have lived continuously in the USA for at least five years prior to naturalization. 

They must also show that they have been physically present in the USA for at least 30 months out of the five years immediately before filing for naturalization and must be able to read, write, and speak basic English. 

Other than a civics test, minimal additional conditions are required in order to obtain citizenship. 

"The US EB-5 Immigrant Investor Program is a popular pathway for entrepreneurial investors seeking US residence, and the recent reforms have only served to strengthen the program’s appeal as they provide more security and transparency for applicants and have speeded up the process. This has been reflected in the increase in applications, with the program proving particularly popular among investors from across the globe. In today’s uncertain world, we expect the lure of the wealth of opportunity and high quality of life on offer in the USA to endure," said Chernega.

But Canada is giving US tough competition

But the USA does have one surprising competitor — Canada, where the net high-net-worth-individual inflow this year is likely to be 3,200. Given that the USA is almost 17 times the size of its northern neighbor, Canada would appear to offer significant advantages to potential investors.

Part of that is accounted for by the huge rise in migration away from mainland China, which is forecast to lose 15,200 millionaires this year as Xi Jinping continues to exert tight control over the economy. There has been a significant increase in Canada’s Chinese community in recent years, notably in British Columbia. Vancouver has become one of the most desirable destinations in North America, growing by over a quarter of a million people in the past decade, with new businesses springing up everywhere and housing costs rocketing. 

"Canada’s boom in the oil and metallurgical industries is also assisting the growth of homegrown millionaires, putting it in 9th place in the Top 15 wealthiest countries (W15) by the end of last year, with a millionaire population of 371,200. But the country may also be benefitting from the political uncertainty south of the border as we approach the US Presidential and Congressional elections in November. Whether Trump or Biden wins is probably not critical for high-net-worth individuals deciding where to base themselves. But the fear of political instability probably is. There is much pent-up suspicion on both sides of the political divide that their political rivals may try to steal the election. Even sober political analysts have conceded that this could degenerate into serious violence, echoing the events of 6 January 2021 when Trump supporters stormed the Capitol in Washington. Nonetheless, the USA remains by some distance home to the largest number of billionaires and centi-millionaires — nearly 800 of the former and 10,000 of the latter," said Misha Glenny,  Rector of the Institute for Human Sciences in Vienna.