WHAT DOES BREXIT MEAN FOR EB-5?
The British voters have just spoken in what may be the most consequential decisions in modern history. Voting 52% in favor of “Brexit”, the UK has taken a dive into the unknown, voting in favor of severing ties with the largest economic and political union in the history of human civilization. While the Treaty of Lisbon, the agreement that the UK signed to join the EU, does have a set legislative protocol for withdrawal, known as Section 50, no country has ever undertaken such a course of action. While we all may shake our heads, all this is happening 3,500 miles away, could Brexit affect EB-5? The answer is absolutely! And in more ways than one, including at the expense of many rival immigrant investor visa programs around Europe.
Great Britain is truly coasting into uncharted waters and a great deal of uncertainty lies ahead. First and foremost is who will lead Britain? Prime Minister David Cameron, who campaigned vehemently in support for the Remain camp, announced his resignation today. Whoever replaces him will have to contend with a Parliament split between Members who vigorously support the European project, and those who are completely against it. What will happen to the multinational firms that take advantage of the EU’s passport rules allowing firms to set up shop in one EU nation and operate in all 28 EU nations without setting up local operations in each one? What will happen to the free movement of people and capital – the fundamental basis for the European Union? Surely if Britain wants to maintain trading with the largest and richest economic bloc in the world, it will have to make some concessions. Finally, will the United Kingdom even remain a united kingdom? With Scotland and Northern Ireland undeniably voting to Remain, the pipe dream of an independent Scotland and a unified Ireland could become a reality. Pound sterling fell to its lowest level since 1985, and is likely to remain depressed for a considerable period of time. While the current rate is $1.37 against the dollar, investors like George Soros predict that the pound will plunge even further, as low as $1.15. This is catastrophic for anyone who has made investments in pound-denominated assets. 12 months ago, it was Greek default that sent the Euro plunging. If the last year shows anything, it is that the US Dollar will continue to be a safe and reliable currency to do business with and invest in.
All of these things can only mean increased interest in the EB-5 Program. Deep economic uncertainty in the UK and Europe as a whole can only serve to divert interest away from those regions to the much more stable United States. Greater interest in the United States will not just be a product of the US’s stability and macroeconomic strength; it will also come at the expense of many rival immigrant investor visa programs around Europe. In countries like China, a primary selling point of many of these programs, such as Cyprus and Malta, is that soon after the application process, an investor is granted a conditional European residence card, allowing the individual to reside indefinitely anywhere in the EU. For investors looking to enroll their children in Britain’s world-class educational institutions, for example, such programs provide a straightforward solution. Brexit ensures that this pathway is no longer a viable one.
Thus, between Britain’s messy divorce proceedings, the inability to market programs such as Cyprus as pathways to the UK and the United States’ political and economic stability, one can only expect stronger growth in the EB-5 program.
Reprinted with permission.
Mona Shah, Esq. has over 17 years of legal experience, with more than 13 years concentrated in U.S. immigration and family law and litigation. Mona’s extensive knowledge of all facets of U.S. immigration law, and her practical expertise ranges from specialist business petitions to complicated, multi-issue deportation and removal litigation. Her firm, Mona Shah and Associates, represents individual, high profile and corporate clients from all over the world. Mona is highly proficient and experienced in EB-5 law and practice, and is the author of a published book for investors on the EB-5 laws and procedures (EB5 for the Chinese Investor, available on Amazon). The second updated edition is scheduled to be published shortly. Mona is voted Top 25 EB-5 Attorneys by eb5investors.com and Top 10 EB-5 Attorneys by eb5info.com. She is also an adjunct professor at the Zicklin School of Business at Baruch University