According to the US Department of State, FY 2016 saw nearly two times as many EB-5 immigrant investor visas being issued to Latin Americans as had been issued in FY 2015. This was a result of greater effort being put into encouraging Latin Americans to participate in the EB-5 Program in addition to the current economic and political chaos in that part of the world.
Most of the increase in successful EB-5 petition adjudication was due to immigrant investors in Brazil, who received four times as many visas in FY 2016 as they had the previous year. This was greater than the number received by investors in any other non-Asian country. In Venezuela, as well, the increase was substantial, as the amount doubled from FY 2015 to FY 2016. There were 412 EB-5 visas in total granted to Latin Americans in FY 2016 compared to the 207 the previous year.
Why Brazil and Venezuela?
The increase in EB-5 visas in Brazil and Venezuela appears to be due to the increase in crime that has resulted from the political and economic chaos in the region. Brazil has seen its share of government scandals since the middle of 2016, and its economy has dropped drastically, sending crime rates through the roof. In Venezuela, violent crime has also increased substantially and there has been an increase in conflict between the government and demonstrators. In addition, Venezuela’s economy has been experiencing rapid inflation.
In contrast to Brazil and Venezuela, Mexico has seen a dramatic decrease in EB-5 visas. This is expected to continue due to recent political events in the United States related to the 2016 election of President Trump.
Argentina and Columbia both saw an increase in EB-5 visas as well.
Shifting the Focus from China
While China has historically been the main focus of EB-5 visa promotion, in recent years, EB-5 promotors have turned to promoting the program in Latin America. As the Chinese government continues to implement strict regulations regarding foreign investments, a Latin American countries, specifically Brazil and Venezuela, are becoming the central focus of EB-5 marketing efforts. This change in focus has contributed in part to the increase in EB-5 visas being granted to Latin Americans.
Most of the promotion efforts have centered around making Latin Americans aware of the EB-5 program and the opportunities it offers. Promoters of the program have also put a substantial amount of effort into building relationships with immigrant attorneys, tax specialists, and financial consultants in Latin America, and it has not been without its rewards.
Latin America regulations have presented some challenges, however. Each country in the region has its own set of regulations, and research must be done by the players to make sure local regulations related to currency exchange, taxes, and investment fund origins are complied with.
Temporary Residents as Potential EB-5 Immigrants
Because of the difficulty in identifying and meeting the requirements of individual countries in Latin America, many EB-5 promoters have focused on Latin Americans who currently have temporary resident status in the United States. A large portion of Venezuelans and Brazilians who apply for EB-5 visas already have temporary resident status and are merely seeking to change over to permanent resident status. The political views of the current President have encouraged temporary residents to seek ways to become permanent residents for greater security, and the EB-5 program is a desirable option for those who have adequate funds.
Cultural Considerations
Cultural considerations must be taken into consideration when promoting the EB-5 program to Latin Americans, whether they are already temporary U.S. residents or still residing in their home countries. Real estate projects, in particular, are of great interest to Latin American immigrant investors, as they prefer projects that are small in scope and that involve physical construction that is observable to investors.
Latin Americans also prefer to invest through a regional center rather than directly in an EB-5 project. Their goal is successful immigration, not direct and extensive involvement in a new enterprise. There is little desire to start a long-term business. Since Latin Americans see the United States as a land of opportunity and a new life, EB-5 projects based in the United States are particularly appealing, especially in areas like Florida, Texas, California, and New York.