By Scott Murdoch, Youn Ah Moon and Sinead Cruise
SYDNEY/SEOUL/LONDON (Reuters) – U.S. President Donald Trump’s $5 million so-called ‘gold card’ visa program is unlikely to trigger a major inflow of wealthy global investors seeking U.S citizenship because of concerns over higher taxes, immigration and wealth advisers said.
Trump said on Tuesday he planned to replace an existing EB-5 immigrant investor visa program, which requires a minimum $800,000 investment, with the gold card plan that would allow U.S. citizenship to foreigners promising to invest in U.S. businesses.
Details of the new plan would be released in two weeks, he said.
“I do not believe that the current POTUS offer will have a big impact, as getting a green card in the U.S. if you meet certain criteria, is not difficult,” said Bassim Haidar, a former UK non-domiciled multimillionaire told Reuters.
“Paying $5 million for a golden visa and getting taxed on your global income defeats the purpose.”
Trump’s plan comes at a time when the European Union is putting pressure on member states to withdraw or tighten residency-by-investment programs, which can trigger house price bubbles and bring marginal benefits to GDP, as well as increase the risks of tax evasion and corruption.
A 2021 study of EU golden visa programmes by London School of Economics and Political Science and Harvard University researchers found that the funds generated by these schemes represented only a “miniscule” proportion of foreign investment with “negligible” economic impact.
The EB-5 visa was primarily used by Hong Kong and China residents who owned businesses in the U.S. or wanted their children to study in the U.S., said John Hu, founder of Hong Kong-based John Hu Migration Consulting.
Raising the investment threshold to $5 million would be deterrent for many Chinese nationals currently accessing the scheme, he added.
“The total number of applicants, if the golden visa is going to replace the EB5, will drop significantly,” Hu told Reuters, adding global tax liabilities were always a concern for rich people.
Trump said the gold card program would be open for wealthy people, such as Russian oligarchs, to apply.
The EB-5 Immigrant Investor Program, administered by the U.S. Citizenship and Immigration Services, was created by Congress in 1990 to “stimulate the U.S. economy through job creation and capital investment by foreign investors,” according to the USCIS website.
“It could be a negotiation tactic to increase the amount of U.S.-bound investment but considering the amount I don’t think demand from Korea will increase significantly,” said Kim Ji Sun, president of Dae Yang Immigration Law Group in Seoul.
“It also requires congressional approval so Trump alone cannot decide to eliminate the current EB-5 program. EB-5 is also about investing money so eliminating it wouldn’t make sense.”
Grace Tang, CEO at Singapore-based Phillip Private Equity, which helps family offices apply for Singapore’s global investor program, which gives local residency rights, said U.S. global taxation rules could be a deterrent.
Tang, however, said that the U.S. had always been the “American Dream” or many potential immigrants from Asia, and many Chinese people who are familiar with the EB5 program would likely apply for the new scheme.
(Reporting by Scott Murdoch in Sydney, Youn Ah Moon in Seoul, Xinghui Kok in Singapore and Sinead Cruise in London; Editing by Sumeet Chatterjee and Kim Coghill)
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