US Senate Propose 62.5% Increase in 'Golden Visa' Investment Requirement
Considering dollar strength at the time of writing, it's hard to fathom quite why the US EB-5 Immigrant Investor programme could potentially become a lot more expensive. The Senate has put forward fresh proposals to increase the minimum investment by a foreigner in real estate by $300,000 to bring the requirement to a whopping $800,000.
Admittedly, some investors in US real estate markets will have their currency pegged to the dollar such as those from the UAE and although a green card will be more expensive, it should still be reasonably affordable. However, for Chinese, Russian and European investors with currencies already at a considerable disadvantage to the dollar, the American Dream appears to be slipping away.
The EB-5 programme was created by US Congress in 1990 to stimulate the economy through the creation of jobs with foreign investment capital.
The main objective of the programme was to drive investment towards certain employment areas with high jobless figures and for that reason, the capital required for a visa in a 'Targeted Employment Area' currently stands at $500,000 - half the price of a general investment under the terms of EB-5 to incentivise foreign investors.
Jobless data from the US has been weak throughout the first half of 2015 which has been the only detriment to dollar strength in recent months. Foreign exchange analysts predict continued upward movement of the world's trading currency for at least the rest of the year.
The underlying impact on non-dollar or non-dollar-pegged property buyers in the US could be huge if the proposals come into force when the EB-5 programme expires in September this year.
According to Savills, 10,692 EB-5 visas were issued in 2014 and the year before the programme contributed more than $1.5bn to the economy, creating 31,000 jobs. The programme is a critical element in the recovery of the US economy making it difficult to understand the logic behind making the opportunity more expensive.
London remains the most popular destination for non-EU investors including buyers from the UAE and is likely to remain so if the EB-5 programme becomes even less affordable.
