Canada's Immigrant Investor Program (IIP) or the US EB-5 program?

The Canadian immigrant investor program was seen over the past few years as one of the easiest routes for permanent residency in North America. It served to attract many immigrants to Canada however changes in that program significantly increasing the level of investment required has switched interest to the comparable program in the USA; the EB-5 immigrant investor pilot program.

The Canadian program has doubled its requirements from a five year investment of CAN $400,000 to CAN $800,000.  By comparison the equivalent investor visa in the USA, the EB-5 visa, has, for the time being, maintained its investment requirement at a much lower level of $500,000. However, the increasingly popular US EB5 pilot program, which provides all the investors direct family (applicant, spouse and children under 21) with much coveted green cards allowing permanent residence, is scheduled to end in 2012.

Another financial consideration is that the Canadian program requires potential investors to have a personal net worth of CAN $1.6 million to meet the necessary qualifying criteria whereas the US programs criteria is a much lower personal net worth of $1 million.

One of the reasons for the decision to increase the financial requirements for the Canadian program has been the enormous growth in the volume of applications over the past decade; the IIP program has been particularly popular with Asian immigrants.  It is expected that the substantial increase in the cost requirement of the Canadian program will see a large increase in demand for places on the US program, which however has a relatively low limit of ten thousand visas.

The U.S. immigrant investor program offers a substantial choice of options which are approved by the US government through a range of regional center programs. These regional centers cover a mixed range of investments such as hotels, buildings, medical facilities, university expansions, agricultural programs and loans to business development agencies etc. However, leading specialists of the EB-5 program have identified that these programs can vary considerably in quality and track record.

Whereas some of the programs have been well thought through and can provide evidence of meeting US Government requirements from start to finish, such as creating ten jobs per investor, other programs could be viewed as far more speculative and may place the immigrant investors $500,000 at potentially greater risk, with a much more speculative exit strategy for the eventual return of their investment.

Unfortunately there are reports of non-English speaking overseas investors not being provided with all the positives and negatives of the EB-5 program and as a result may be at an unnecessarily high risk of buying into an unproven or problematic program, rather than a more proven program. Many are concerned that there could be issues, particularly in China, with some Agents receiving very high levels of commission and only recommending one or two programs which pay much higher levels of commission.

Interest in the U.S. EB-5 program has increased substantially since the cost of the Canadian program was increased so dramatically, although there are concerns that the relatively modest number of visas under this program could fail to satisfy potential demand. Certainly feedback from families considering the positives and negatives of immigration to either The USA or Canada have identified the US way of life, opportunities, education and weather as very favorable. The fact that the US EB-5 process can be relatively speedy, approximately six months, whereas the Canadian program was seen as taking much longer.

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