2017 was a year of significant change in the immigration sector, with varying immigration policies across different countries, leading to uncertainty in overseas immigration. As 2018 approaches, what trends will the overseas immigration market present? Worldway Immigration Group has forecasted immigration trends for two consecutive years, receiving significant attention from the industry and investors each year. Based on the development of the immigration industry in 2017 and the trends in various countries' immigration policies, the expert team at Worldway Immigration Group has conducted careful research and analysis, assessed the dynamics of various national policies, and consulted with immigration professionals and investors from relevant countries to release the "Five Major Immigration Trends of 2018" for the third time, sharing these insights with the industry and investors.
1. The United States launches its largest immigration reform in 30 years; immigration policies will tighten unprecedentedly
Following the U.S. tax reform, the Trump administration will initiate a comprehensive reform of U.S. immigration law, the most significant in 30 years. On this issue, the Republican and Democratic parties remain divided. Within the scope of executive power and under the influence of the "America First" policy, the White House will strictly control L-1 and H-1 visas, rigorously investigate fraudulent activities related to EB-1C and EB-3 visas, and intensify efforts to combat illegal immigration. However, the Republican Party may compromise with the Democrats on the protection of undocumented minors in exchange for support in other areas. Overall, in 2018, as the U.S. initiates its largest immigration law reform, the Republican and Democratic parties may not reach a consensus; under these circumstances, U.S. immigration policy may tighten unprecedentedly.
2. The new EB-5 bill will take effect, having a significant impact on investment immigration
After ten extensions, the new EB-5 bill is expected to take effect in 2018, significantly impacting investment immigration. Once the new bill is effective, the threshold for EB-5 investment immigration will be greatly increased, creating a "crowding-out effect" that will push a portion of the middle class out of the immigration ranks. On the other hand, due to the implementation of U.S. tax reduction policies, U.S. investment immigration will show a trend toward high-end development. Thirdly, the visa backlog will become more severe in 2018, and the number of applicants will decrease significantly. Under these circumstances, projects that shorten the waiting period will become highly popular in 2018, dominating the development of the Chinese EB-5 market, while projects with severely insufficient equity capital and excessive reliance on EB-5 financing will be prone to failure. Meanwhile, applicants with young children or no accompanying children, who are less affected by the backlog, will be more inclined to choose projects that have already been approved by the USCIS, have sufficient developer equity, simple investment structures, and first-priority repayment guarantees for EB-5 funds.
3. The combination of private equity investment and immigration investment becomes a new feature of cross-border asset allocation
Due to the severe backlog, enthusiasm for EB-5 investment has waned, and U.S. project developers have begun seeking to compensate for the shortfall in EB-5 financing through private equity in the Chinese market. At the same time, the trend of global capital returning to the U.S. triggered by U.S. tax cuts has accelerated the dollarization of global asset allocation, thereby stimulating Chinese investors' enthusiasm for U.S. investment. The waterfall distribution method common in the U.S. private equity market will gradually become familiar to Chinese investors, and EB-5 projects that mix private equity with EB-5 financing will become more popular in China. Immigration investment in the U.S. will become more rational; the home-buying needs of immigration investors will be more for residential purposes, and investors will begin to shift from pure real estate speculation to U.S. Real Estate Investment Trusts (REITs), with open-ended real estate funds with higher liquidity being particularly popular.
4. The proportion of U.S. investment immigration is declining, and the trend of diversification in immigration investment will become more obvious
With the decrease in the number of U.S. investment immigrants, Canadian investment immigration will become a hot spot for immigration investors, but due to the limited quota for Canadian investment immigration, its diversion function is not strong. In contrast, European investment immigration has no quota restrictions and will attract more investment immigrants to turn to Europe, so the diversion function of European investment immigration is stronger. In particular, the Greek real estate investment immigration program, with its high cost-performance ratio and low investment threshold, will be a new hot spot for European investment immigration in 2018. At the same time, with the easing of the EU refugee crisis and economic recovery, the value of EU passports has been rediscovered, and the Cyprus real estate investment program, which grants EU citizenship, will continue to be popular.
5. In 2018, China will implement the CRS financial account tax information exchange for the first time, and low-tax immigration programs will be very popular
In 2018, China will implement the Common Reporting Standard (CRS) for the exchange of financial account tax information for the first time, and global tax transparency will be unprecedentedly improved. Under these circumstances, low-tax immigration programs will be very popular. Consideration of tax systems will become an important factor influencing the trend of immigration investment. Taxation and business will become another motivation for immigration, second only to children's education. Commonwealth countries in the Caribbean and South Pacific regions share the characteristics of simple tax systems, no tax on overseas income, and no inheritance or value-added taxes; therefore, they will attract more investment immigrants to make immigration choices from a business and tax perspective. In particular, investment citizenship programs in countries like Saint Lucia and Dominica, which have lower investment costs and higher cost-performance ratios, will be more popular. Due to Saint Lucia's unique national conditions, it will become the Commonwealth country with the fastest growth in the number of applicants in 2018.
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