Recent months have seen an increase in demand by Israelis for permanent residence visas for the US (“green card”), by way of business investments, in accordance with US immigration rules. The rules in the US are clear-cut: All who knock at the gate are equal, but those with well-lined pockets are much more equal than the others.
For some of the Israeli applicants, immigration as such is not the motive, but an added bonus at the most. Many of them are key executives in the high-tech or other business sectors, whose presence in the US is vital to the success of the projects their companies are involved in. In some cases, the companies themselves step in to help a specific worker invest in a new business in the US, either by way of partnership or otherwise, with the aim of guaranteeing his presence on US soil.
According to Adv. Rakefet Carmon of New York law firm Carmon & Carmon, which specializes in visa applications for Israelis and other immigration issues, the increase in demand has been caused by a shortfall in the number of H1-B work visas for engineers and other high-tech vocations in the US, which grant a stay of several years.
Under current US legislation, 65,000 H1-B visas are allocated every year, but this quota is filled within weeks of the date of publication. The 2007 quota for visas in this category (which goes into effect on October 1, 2006) was already full at the beginning of April and if Congress does not move to amend the law and increase the quota as high-tech companies inside and outside of the US have been demanding, the situation in 2008 will look even grimmer.
”As a result, our firm, and probably other firms too, have noticed an increase in the number of people interested in bypass tracks, specifically the ‘million dollar’ track to getting a green card,” says Carmon. “I believe that these options also appeal to people seeking to work in or immigrate to the US from other countries.”
There are two main tracks that enable investment to be used as an entry ticket to the US: The E-2 investor visa, which is not an immigration visa, and the EB-5 permanent residency visa for investors, which is one stage prior to obtaining citizenship.
For well-to-do people seeking to work in, or immigrate to the US, the E-2 visa is the ideal solution with a relatively small number of obstacles. The immigration authorities do not set any financial caps and do not specify the minimum investment needed to qualify for the visa. The official leaflet states that applicants must “invest a substantial capital,” that will “produce a higher income than is required to ensure the minimal subsistence of the investor and his/her family.”
Experts on immigration issues say that, in many cases, the authorities consider an investment of $100,000 as sufficient to grant an applicant a E-2 visa, 10% of the sum required of an applicant for a permanent residency visa for investors. But many Israelis looking for alternatives to the H1-B visa are forced to choose what is known as the “million dollar green card.” This option is open to anyone willing to invest at least one million dollars in launching a new business in the US, or expanding an existing one, with the basic requirement that the business must create at least 10 new jobs for American workers (the investor and his family may not be included as workers, although family members will be eligible for green cards).
Alternatively, the immigration authorities are willing to allow an investment of $500,000 in the US version of a development region; “a rural region, or an urban region where the unemployment rate is at least 150% of the national unemployment rate.” However, the authorities are likely to ask for an investment in excess of one million dollars, if the applicant chooses to set up his business in a region with low unemployment. The law allows for the purchase and expansion of an existing business, provided this creates at least 10 new jobs.
Carmon says that there were not many takers for the million dollar green card option before the shortage of H1-B visas became so acute. “People used to say, ‘if I had a million dollars, why would I need to immigrate to the US at all? and in any event, rich people never had a problem getting a tourist or student visa to the US.
”This track now serves as a backdoor entrance for people whose professional commitments require their presence in the US, but who are unable to obtain the appropriate visa,” explains Carmon. An Israeli high-tech employee says that “Israelis don’t like to talk about it, possibly out of fear of being branded a sucker if they end up having to shell out one million dollars for a visa to the US. Many people do it out of lack of choice, although in many cases, their employers help them.”
Carmon notes that occasionally companies urgently need to send an employee to the US for an extended period, and many of them find ways to help both the employee in question get the visa, and themselves into the bargain. Some companies give the employee a personal loan (the law allows loans to be used to finance part of the investment, although any loan must be repaid by the investor personally). In other cases, the company becomes a partner in the new business, subject to the constraints prescribed by the law. Either way, the company buys the employee’s loyalty by relocating him to the US.
Carmon says that people applying for visas on this track face a number of obstacles on the way, of which the largest is the American requirement for transparency. “Following the September 11 terror attacks and the intensive anti-terrorism campaign that has been continuing since then, the immigration authorities insist on a rigorous inspection of the sources of an investor’s finance. The burden of proof is on the investor, who must account for every single cent of his capital, and this is not always an easy task.”
But the bureaucratic obstacles don’t end there. The entire scheme is subject to review two years after the initial investment. Did the investor actually add 10 new jobs to the US economy? Are all those who were taken on still working two years on? Only after the immigration authorities have satisfied themselves that the investment is legitimate, will the investor and his family receive the long-awaited green card. Although this is a via dolorosa, an increasing number of Israelis, who either want or need to live in the US, are willing to endure it.
Carmon notes that the investor visa is not available to most Israeli citizens because successive governments in Israel never bothered to sign the appropriate treaty with the US. According to her, the only Israelis that can use the investor visa track are those with dual citizenship, although exactly how many of them do this in practice is not clear. Carmon believes that the increasing global popularity of this track has motivated Israelis to apply for a second passport from, for example, European countries where their parents were born. This will enable them to set down roots in the US. This qualifies them for an E-2 visa and a foothold in the US.
The lack of willingness by Israel to open this kind of track for its citizens, in an era when restraints on the movement of currency are being lifted, is apparently an anachronistic relic from that far-off period when the mandarins in Jerusalem were not terribly interested in overseas investment by Israeli citizens. However, most countries in Europe, Asia and Latin America have signed such a treaty and their citizens are making good use of the investor visa category.
28,290 E-2 visas were issued in 2005, a 40% increase compared with 1997. Japanese investors received 12,010 E-2 visas in 2005, a 16% rise compared with 1997. UK citizens received 3,170 visas, an increase of 47%, while German citizens received 3,066 visas, an increase of 85%.
Published by Globes [online], Israel business news - www.globes.co.il - on June 22, 2006
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