Even though not a great believe in the value of investor immigration, still notable these restrictions under USMCA:
Foreign investors investing in the United States today are being stymied by a U.S. immigration border policy that is preventing them from looking after their businesses in the country. The policy is particularly aggravating to Canadian investors, but is also a problem for other foreign investors that are not visa exempt, that is, from countries where the applicant must apply for a B-1/B-2 visitor’s visa to come to the USA. The relevant rule could be easily changed by U.S. Customs and Border Protection (USCBP) through a policy directive. The question is what useful purpose does the current policy serve if it is needlessly interfering with foreign investments in the United States?
The Problem
The problem has arisen largely due to the Covid-19 pandemic. Foreign investor appointments for E-2 treaty investor visas under the USMCA, formerly the NAFTA free trade agreement, are taking an inordinate period of time to schedule. Indeed, at one point, consular officials in the past were even unable to say how long it would take to get interviews for E-2 visas. This left foreign investors having to come to the U.S. in some other way until they could finally get their E-2 visas. While applying for a change from visitor to E-2 status inside the U.S. is a possibility, some time ago the Consul General at the Toronto Consulate advised U.S. attorneys to avoid that option, implying such applications are likely to be denied. It appears that U.S. officials saw resorting to a change from business visitor to E-2 status inside the U.S. as playing the system because processing of E-2 visas are normally in the purview of U.S. Consulates abroad. So the only reasonable way has been to enter the U.S. as business visitors.
The key snag is the limitation in the amount of time that E-2 investors are allowed to stay in the U.S. in visitor status. Current border policy is to grant a maximum of six months. Indeed, the policy is to refuse entry to business visitors who have already been physically present in the U.S. for six months in any year.
Unwritten Policy Rule
In a previous Forbes article I described the rule as follows:
“For Canadians, one of the issues that often arises is whether the visitor has already spent more than 183 days in a year in the USA. U.S. Customs and Border Protection (USCBP) officers have been enforcing what Ira Kurzban, the Dean of American immigration attorneys and author of the authoritative book Kurzban’s Immigration Law Sources, diplomatically calls an “unwritten rule” that visitors may not spend more than 183 days in any year in the USA. Written or not, the USCBP custom at the U.S.-Canada border is to prevent visitors from entering in most cases when it is determined that the visitor has already accumulated 183 days of U.S. physical presence in the last year.
The rationale for the rule comes from the way USCBP officers assess visitors coming to the U.S. As a general rule, such officers consider the following elements in making a decision about allowing a visitor to enter the U.S. Firstly, is the applicant a security threat? Secondly, is the applicant a criminal? Thirdly, is the applicant working illegally in the U.S.? Finally, is the applicant really living in the United States permanently but only saying he is visiting? A convenient way of implementing the policy considerations raised by such thinking is to prohibit visitors from entering the U.S. for more than 183 years in any year. After all, how many people can live without earning income for six months or more?”
Serious Hardships
Until visa wait times at the U.S. consulate in Canada are reduced to reasonable levels, however, this rule is imposing serious hardships on E-2 investors. To qualify for E-2 visas, investors have to make more than a marginal commitment of their funds into the United States. Usually this takes the form of a purchase of a business, a hotel for example. Sometimes it takes the form of a start-up where the investor hires employees or commences offering products or services. Whatever the form taken, foreign investors want to be able to be where their money is to be on top of what is going on.
What is needed is for the USCBP to realign its policy with the needs of investors and with the processing times of the U.S. consulates abroad, including the ones in Canada. At the present time, scheduling interviews at U.S. consulates in Canada for E-2 visas for example, are taking at least eight months or more. Applying the current USCBP 180-day policy means that Canadian investors can be shut out of the United States for at least two months or more while awaiting approvals. Clearly these investors need to be granted more than six months time in the U.S. under these circumstances. In the normal course of events the USCBP has the authority to grant business visitors up to one year’s time on an entry. So why not grant these investors such approvals?
A False Alternative
It is true that such investors can apply to extend their visitor’s status for another six months from inside the U.S. But that is a needless extra hardship that is fraught with uncertainty and possible unpleasant future consequences while the investor awaits a ruling. Why put the investors in that position?
What E-2 Visitors Can Do
While business visitors are constrained in what they can do while being in the United States, still such a visitor is at least entitled, “to examine or monitor potential qualifying investments” so as to be ready to apply for an E-2 visa. True, the investor must behave as a business visitor and is “precluded from performing productive labor or from participating in the hands-on management of the business.” Still, there is a list of things such a visitor can do. For example, a business visitor can observe the conduct of business, negotiate contracts, undertake study incidental to the purpose of the stay, consult with clients or business associates, participate in conventions, conferences, or seminars, make phone calls, give employees instructions, take clients to their cars and even engage in commercial transactions outside of gainful employment. The key is no “hands-on-work” and no salary being paid. This can all work if handled properly.
Being Reasonable For A Change
Assuming the USCBP officers applied a more reasonable time frame policy for business visitors dealing with E-2 investments by matching visiting times with likely consular processing times of E-2 visa application, and assuming officers were reasonable in how they viewed what these investors are doing while complying with their periods of authorized stay, these headaches could be avoided and a more reasonable business-friendly environment could be created for E-2 investors.
Didn’t know about this relatively low-cost loophole:
With the EB-5 immigrant investor visa to the United States getting more expensive, wealthy Indians are turning to the Caribbean island of Grenada as a route to their US citizenship dreams.
Immigration lawyers said, in the past three months, interest in the Grenada Citizenship by Investment (CBI) programme has increased from India, as the Caribbean country has an investment visa treaty with the US. Mark Davies, the global chairman of immigration law firm Davies & Associates, said there had been a definite drop in interest towards the EB-5 programme after the US changed the investment guidelines under it.
From November 2019, the minimum investment required under the EB-5 Immigrant Investor Program had been raised to $900,000 from $500,000 in a Targeted Employment Area (TEA) and from $1 million to $1.8 million in non-TEAs. “This, coupled with a longer wait time for Indians because of an annual country cap of 700, has led people to explore other options,” said Davies, who has been working with clients in India on their EB-5 investments for almost a decade.
Davies’ firm is currently helping processes a few applications for the Grenada CBI programme. There are a lot more enquiries which are likely to convert into applications over time, he said. Turkey is another country which offers a similar route to the US. Under the Grenada CBI programme, the applicant has to make a $220,000 investment in a government-approved real estate project. What makes the country an attractive destination is that it has an E2 visa treaty with the US, wherein a Grenadian can apply for US citizenship and usually get it within three months. A US E-2 visa allows an investor to live and do business in the US in exchange for a minimum investment of $150,000. The investment must be in an enterprise that the investor is able to “develop and direct” and which is at least 50% owned by the investor. In 2018, the US processed 40,000 E2 visas. Country-wise breakups are not available.
Mohammed Asaria, who is the director of Range Investments that facilitates investments in real estate projects for citizenship in Caribbean countries, said he was seeing a lot of interest from Indians, including NRIs from the Middle East, for this programme. The quick processing time, typically 90 days for the Grenadian citizenship, and another 90 days for the E2 visa, is also a big factor driving the shift towards this. “This is no longer an outlier — at all immigration conferences, Grenada is very topical and is at the forefront at the moment,” he said.
The added advantage of this route is that it allows the spouse of the visa holder to freely work in the US and also covers dependent children under 21. And it’s not just the Caribbean island that is benefiting from the higher entry threshold for the EB-5 programme. The Republic of Cyprus, which also offers a similar programme, is emerging as another preferred option. “In the last few months, we’ve seen a lot more interest from India after the changes to the EB-5 programme,” said Dillon Bhatt, the chief of international business development at investment consultancy firm Millwood Kane International.
From November 2019, the minimum investment required under the EB-5 Immigrant Investor Program had been raised to $900,000 from $500,000 in a Targeted Employment Area (TEA) and from $1 million to $1.8 million in non-TEAs. “This, coupled with a longer wait time for Indians because of an annual country cap of 700, has led people to explore other options,” said Davies, who has been working with clients in India on their EB-5 investments for almost a decade.
Multicultural Meanderings 