Brazil, the largest and economically strongest South American nation, has lately become a key participant in the EB-5 Immigrant Investor Program. This is partially due to a recent slowing of its economy, which has been expanding since the 1990s. Brazilian citizens are now investigating investment opportunities beyond their country’s borders and developing a strong interest in exploring new cultures and lifestyles. Of course, American ideals and attractions have caused many Brazilians to look in that direction for a new life, and they have discovered the allure of the EB-5 program as a point of entry.
The Increasing Brazilian Interest in the EB-5 Program
The numbers are revealing: in fiscal year 2017, Brazil ranked third for nations participating in the EB-5 Program, securing nearly 3% (a total of 282) of the available EB-5 visas. By far, citizens from mainland China still topped the list, snagging 75% of the available visas. Vietnam came in second, with almost 5% of the visas.
This represents a noticeable jump from fifth place from the year before, pushing this South American nation past Taiwan and South Korea, nations in a holding pattern as to the number of visas issued each year. The number of visas issued to Brazilian investors has grown by 100 per year. Now that both mainland China and Vietnam are facing backlogs, the possibility of sustaining or increasing that pace seems highly probable. Since Brazil is still new to the EB-5 game, they are nowhere near reaching a retrogression stage like China and Vietnam, where waiting lists can extend for years. Developers are actively wooing Brazilian investors for their upcoming projects because of this surge in interest and participation.
Moneyed Interests in Brazil
Thanks to Brazil’s impressive economic growth over the past couple of decades, many new Brazilian millionaires appeared, with quite a few of them actively pursuing their own American dream. A two-day EB-5 conference held in São Paulo in April 2018 drew 300 attendees eager to learn more about the program.
One potential obstacle that needs addressing is that Brazilians currently enjoy one of the lowest tax rates in the world. By becoming green card holders, Brazilians would face taxation on all income they receive, regardless of where it originated. This can be considered an additional “cost” of obtaining permanent U.S. residency. Advisors should be able to discuss this point knowledgeably and explain the potential financial impact for Brazilian investors. Brazilian investors with an entrepreneurial mindset may see this additional tax burden as simply a minor obstacle that can be easily overcome thanks to the profitable business opportunities that abound throughout the U.S.
The Brazil–Florida Connection
For more than 20 years, Brazil has enjoyed a close and profitable trading partnership with the state of Florida. The main products imported from Brazil are related to technology and the aircraft industry, with refurbished aircraft parts being the top import. It seems that Brazilians are also comfortable investing in Florida, perhaps due to this historic trade relationship. To date, Brazilians have preferred EB-5 investments situated in Florida, particularly those operating in major cities like Miami, Orlando, and Jacksonville.
Because of the unique tax challenge they face and increasing attention from qualified persons, interested Brazilians are strongly encouraged to consult with qualified and experienced advisors and legal experts to grasp the larger and more complex picture of the EB-5 Immigrant Investor Program and the exciting opportunity it offers. For many investors, the opportunity to work, live, travel freely, and educate their children in America makes the effort more than worth their while.