Trump’s ‘gold card’ visa deal deemed unlikely to shine as a US drawcard

Sydney — US President Donald Trump’s $5m “gold card” visa programme is unlikely to trigger a major inflow of wealthy global investors seeking US citizenship because of concerns over higher taxes, immigration and wealth, advisers say.

Trump said on Tuesday he planned to replace an existing EB-5 immigrant investor visa programme, which requires a minimum $800,000 investment, with the gold card plan that would allow US citizenship to foreigners promising to invest $5m in US businesses.

Details of the new plan would be released in two weeks, he said.

“I do not believe that the current Potus offer will have a big impact, as getting a green card in the US if you meet certain criteria is not difficult,” said Bassim Haidar, a former UK nondomiciled multimillionaire.

“Paying $5m for a golden visa and getting taxed on your global income defeats the purpose.”

Trump’s plan comes at a time when the EU is putting pressure on member states to withdraw or tighten residency-by-investment programmes, which can trigger house price bubbles and bring marginal benefits to GDP, as well as increase the risks of tax evasion and corruption.

A 2021 study of EU golden visa programmes by London School of Economics and Political Science and Harvard University researchers found that the funds generated by these schemes represented only a “minuscule” proportion of foreign investment with “negligible” economic impact.

The EB-5 visa was primarily used by Hong Kong and China residents who owned businesses in the US or wanted their children to study in the US, said John Hu, founder of Hong Kong-based John Hu Migration Consulting.

Raising the investment threshold to $5m would be a deterrent for many Chinese nationals now accessing the scheme, he added.

“The total number of applicants, if the golden visa is going to replace the EB5, will drop significantly,” Hu said, adding global tax liabilities were always a concern for rich people.

Trump said the gold card programme would be open for wealthy people, such as Russian oligarchs, to apply.

The EB-5 Immigrant Investor Programme, administered by the US Citizenship and Immigration Services, was created by Congress in 1990 to “stimulate the US economy through job creation and capital investment by foreign investors”, according to the USCIS website.

“It could be a negotiation tactic to increase the amount of US-bound investment but considering the amount I don’t think demand from Korea will increase significantly,” said Kim Ji Sun, president of Dae Yang Immigration Law Group in Seoul.

“It also requires congressional approval so Trump alone cannot decide to eliminate the current EB-5 programme. EB-5 is also about investing money so eliminating it wouldn’t make sense.”

Grace Tang, CEO at Singapore-based Phillip Private Equity, which helps family offices apply for Singapore’s global investor programme, which gives local residency rights, said US global taxation rules could be a deterrent.

Tang, however, said that the US had always been the “American dream” for many potential immigrants from Asia, and many Chinese people who are familiar with the EB5 programme were likely to apply for the new scheme.

Reuters