Russia as an Emerging EB-5 Market

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With China’s EB-5 market slowing down, regional centers and developers are in quest of markets beyond China to locate dependable sources of investors. Russia and the surrounding Russian-speaking former Soviet republics may be the answer they are looking for.

The market conditions are ripe for serious growth of the EB-5 U.S. Immigrant Investor Visa Program in this part of the world. The worsening economic and political situation coupled with the demographic problem and continued corruption in Russia are creating conditions that are driving more Russians to consider emigration.

The ruble has been devalued by almost 50% since I arrived back in Moscow in 2014. The U.S. continues to slap sanctions on Russia. These conditions encourage emigration in general and something else to consider is that, despite the above, there is still a vast number of high-net-worth individuals in Russia that have the potential to invest $500,000 (or more, if necessary, depending on whether the minimum investment rises to $800,000 or as high as $1.35 million under proposed reforms from congress and the White House) into the U.S. for a period of 5-7 years.

While Russia’s population is decreasing, more and more people continue to move to Moscow. In 2016, the official population of Moscow was just under 13 million, making it the sixth largest city in the world and most populous in Russia. Migrants have been flooding Moscow from other parts of Russia and the former republics in search of a higher standard of living and higher pay. The average monthly salary in Moscow is almost double the nationwide average. This has created an environment of extreme competition for university education and employment and has forced people to reevaluate their long-term plans in favor of a more reasonable and comfortable life.

And of course there is corruption. Obviously, no one country is without corruption in one form or another, but in Russia it’s more pervasive. Russia, according to the Transparency International Corruption Perceptions Index 2016, is in 131st place, compared to the United States which is ranked in 18th place. This means that in Russia, people frequently face situations of bribery and extortion, rely on basic services that have been undermined by the misappropriation of funds, and confront official indifference when seeking redress from authorities that are on the take. Although there may be less corruption now in Russia compared to the “wild nineties,” it is still a big problem. Many who have suffered as a result of corruption are fleeing to countries where it is less of a problem in everyday life.

Given the foregoing and in light of the current situation, Russia and the surrounding markets may be the source of EB-5 investors that regional centers and developers are seeking. The opportunity in these markets is certainly very promising.

Reprinted with permission.


About The Author

Matthew Morley is an American attorney based in Moscow practicing in the area of US immigration and nationality law.


The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.