IM Yearbook 2020/21

These
programmes
are not
going to be for
everyone. Yes, they
are attractive for
younger immigrants
with a good
business idea and
a corresponding
risk appetite.
Some are very specific in terms of their
sponsor and venture capital requirements,
while applicants also often have to
guarantee a certain level of job creation.
These programmes are not going to
be for everyone. Yes, they are attractive
for younger immigrants with a good
business idea and a corresponding risk
appetite. But I think there is still a lot of
risk associated with these programmes.
The traditional private client who already
has businesses and is looking to expand
globally is in many instances not willing to
take the risk associated with some of these
entrepreneurial programmes. Traditional
citizenship or residency programmes
that offer immediate status are more
established in many instances and have a
less complex application process. They will
remain the more popular choice among
more established high-net-worth investors
given the immediate status granted in
many instances although at a higher cost.
There is a lot of talk about hybrid
programmes, whereby applicants
can invest in start-ups or businesses.
Will this be the next incarnation?
Governments are currently experimenting
with different programme designs.
We are seeing different investment
and employment thresholds, while
investments are sometimes more on the
active and sometimes more on the passive
side. I think it all leads towards more
hybrid programmes and systems because
the trend is clear: more scrutiny will be
applied to immigration systems and there
will be more pressure on governments
to only admit the best and the brightest
global talent for the foreseeable future.
One of the big questions with the
new type of programmes is what
happens when the business fails. How
do programmes address this issue?
It really depends on the programme.
Each programme treats project failure
very differently with very different
consequences. So, the EB-5 programme
has historically not been very generous
with project failure. Investors and
entrepreneurs essentially lost their spot in
the US green card line, had to reapply and
most likely also lost their initial investment
money. Recently, there have been some
regulatory changes that allow investors
to keep at least their spot in line, but they
still have to re-file an application and can
still lose their investment funds in many
instances. So, in my opinion the US system
has not been very favourable to project
failure. In other countries project failure
is not necessarily fatal, and the investor
doesn’t need to immediately leave the
country. The visa can be revived or at least
proceed on a conditional status. There are
a whole host of approaches to that issue,
and the countries that are the most lenient
usually attract the greatest numbers of
entrepreneurs to their programmes.
Most traditional citizenship and
residence schemes have the objective
of convincing highly skilled people to
relocate to their adopted countries.
However, many programmes report
cases of entrants who drop off
the radar and – beyond their initial
investment – are not engaged
with the local community. How
could programmes be improved
to better achieve this objective?
Physical residence requirements are
helpful to governments when seeking to
ensure people spend time in the country.
In order to receive residence in most
of the traditional receiving countries –
the US, UK and Australia – one must
permanently reside in the country or at
least have an intention to permanently
reside in the country. However, it’s all
about governments striking the right
balance. In the US for instance, there is
no fixed number of days needed to spend
here, but we generally advise clients to
spend the majority of their time in the
US. There is discretion for international
business people and people that are
studying abroad, and there are things a
person can do to protect his or her status
if temporarily living aboard. Nonetheless,
the government really looks into whether
the applicant has ties to the host country
– so they do not only check whether the
applicant pays taxes in the US and has
a residence, but they might even check
whether the applicant’s doctor visits are
in the US, where they attend religious
institutions if applicable, if there are
local accounts, gym memberships etc.
What’s your future outlook for
the entrepreneur visa market?
I think we are going to see a real explosion
in this area globally. What happens
to US programmes will really depend
on the November election results.
Generally speaking, though I believe
entrepreneurial visa programmes will
become ever more popular, particularly
to cushion the impact of the Covid-19
economic crisis. A lot of the arguments
that were made after the financial crisis
with regard to immigration will be even
more pronounced in the current crisis.
That’s why I expect to see a greater
number of job-creation programmes.
Chad Ellsworth is a
BIO Partner at Fragomen’s
New York office, and has
been with the firm for more than
15 years. His practice focuses
on representing individual and
business clients in a wide variety
of corporate immigration, private
client and related employment
matters. Chad advises many
high-net-worth individuals
in their immigration related
investments. As investors
from Asia are the largest users
of global investor migration
programmes, including the
US EB-5 investor visa, Chad
regularly liaises with Asian
private clients to address
their global entrepreneurial
or investor citizenship or
residency immigration needs.
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