Vietnam has demonstrated a pronounced increase in the outflow of investment into the US under EB-5 over recent years, yet with ever-growing wait times for I-526s to be approved, will this growth continue?
Growing demand for the American EB-5 from Vietnam
It is estimated that over 20% of EB-5 investors originated from Vietnam, specifically for those investing in real estate. In 2017 approximately 470 Vietnamese nationals received EB-5 visas and in 2018 it grew by over 50% to almost 700 EB-5 visas.
Various large-scale projects including the Times Square Hard Rock Hotel and Hudson Yards have been seeking investors from Asia. Due to the growing proportion of affluent Vietnamese, these US developers are now seeking investment further afield from China to India and Vietnam.
Yet two areas are hindering the boom in Vietnam’s demand for EB-5 visas.
The expected wait times for a visa to be processed are dragging on and currently it is expected to take up to 7 years for I526s to be processed. This is a substantial amount of time to wait and therefore ev,ermore Vietnamese are exploring other European programs as alternatives.
There has been external criticism on some of the EB-5 investments and the level of risk investors take in their investments. One project that has drawn public attention has been Hudson Yards which was financed through EB-5. Investment levels were at the lower-tier rate of US$500,000 which is reserved for urban areas that require development yet the Hudson Yard Project itself is a high-end Manhattan development. Public criticism on how the investment has been managed has created mounting pressures on the EB-5 programme.
Read more: A Winter of Discontent: An EB-5 Lawsuit and an Extension Plea
What is the EB-5 Investor Visa?
The EB-5 Immigrant Investor Program was created by Congress in 1990 to encourage job creation in the USA and foster inbound foreign investment. It enables approved investors to obtain permanent residence “Green Card” by investing in a Regional Center or in a new commercial business.
To qualify for the lower threshold of US$ 500.00 0 the investor must invest in a Targeted Employment Area that is rural and is in dire need for development funds.
The applicant must demonstrate a business plan, promotional activities on how it will generate revenues and also employment opportunities for the local community (directly/indirectly). The investor should be involved in the daily management of the business operations, solely or in partnership with other lead individuals/associates.
