2017 was arguably the most extraordinary year in the history of immigration, witnessing a series of dramatic events within the industry. How will overseas investment immigration develop in 2018? Recently, Worldway Immigration Group exclusively and authoritatively released the "Five Major Immigration Trends for 2018," which has drawn extensive focus from the industry and numerous domestic media outlets, including ifeng.com, Sina, Caijing, Stockstar, China.org.cn, and Global Times, among others, becoming a major benchmark for the immigration industry once again.
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 to provide the following forward-looking predictions for the investment immigration industry in 2018:
1. The U.S. launches its largest immigration reform in 30 years, with immigration policies set to tighten unprecedentedly
Following the U.S. tax reform, the Trump administration will initiate the most significant comprehensive reform of U.S. immigration law in 30 years. On this issue, the Republican and Democratic parties remain divided. 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. launches this major immigration reform, the two parties may not reach a consensus, and under these circumstances, U.S. immigration policy may tighten to an unprecedented degree.
2. The new EB-5 bill will take effect, significantly impacting investment immigration
After ten extensions, the new EB-5 bill is expected to take effect in 2018, having a major impact on investment immigration. Once the new bill is effective, the threshold for EB-5 investment will be significantly raised, 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. In this situation, projects that can shorten the backlog will become highly popular in 2018, dominating the development of the Chinese EB-5 market, while projects with severely insufficient equity capital or 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, possess sufficient developer equity, have simple investment structures, and offer first-priority repayment guarantees for EB-5 funds.
3. The combination of private equity 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 demand of immigration investors will be more for residential purposes, and investors will begin to shift from simple property speculation to U.S. Real Estate Investment Trusts (REITs), with open-ended real estate funds with higher liquidity being particularly favored.
4. The proportion of U.S. investment immigration will decline, and the trend of diversification in immigration investment will become more apparent
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 limited quotas, its diversion function is not strong. European investment immigration, which has no quota restrictions, will attract more investment immigrants to turn to Europe, so its diversion function is stronger. In particular, the Greek property-buying 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, as the EU refugee crisis eases and the economy recovers, the value of EU passports is being rediscovered, and the Cyprus property-buying immigration 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 highly 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 improved to an unprecedented level. Under these circumstances, low-tax immigration programs will be highly popular. Consideration of tax systems will become an important factor influencing the trend of immigration investment. Taxation and business operations will become another driver for immigration, second only to children's education. Commonwealth countries in the Caribbean and South Pacific regions share common characteristics such as simple tax systems, no tax on overseas income, and no inheritance or value-added taxes, and will therefore 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 fastest-growing Commonwealth country in terms of applicant numbers in 2018.
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