Investment immigration programs are cropping up in large numbers across the globe. Each program has its own unique requirements, investment amount, and advantages that attract foreign investment in order to benefit the specific country’s economy. The most sought-after countries, however, remain the USA and Canada time and time again, and these countries have the most preferred immigration through investment programs in the world.
This article will compare USA’s EB-5 program with Quebec’s Investor Immigration Program (QIIP) which is currently the only passive investment program of its kind in Canada. The comparison will allow you to weigh the benefits of each to be able to make an informed decision as to which program is the right one for you.
Minimum investment required
The U.S. EB-5 program requires an investment of US$500,000 when investing in an approved Regional Center located in a Targeted Employment Area (TEA). If choosing to invest in a new enterprise, the investment required is US$1 million, however, this is not a passive investment option.
The QIIP requires an investment of CAD800,000 (~US$618,000 at today’s exchange rate) for a period of five years, after which the full amount is returned.
Risk of investment
An EB-5 investment goes directly to the Regional Center and is not guaranteed. Some investments can realize a profitable return while others do not realize any. If a Regional Center fails, so does the investment amount as the investor is completely reliant on the success of the selected Regional Center. Due diligence and thorough research is required in selecting a Regional Center with a proven track record in order to minimize investment risk.
The QIIP investment is fully backed by the government and is thus considered risk-free. After the five-year period has elapsed, the full amount is returned to the investor without any interest. There is also the option of financing the investment instead of transferring the full amount up front. Many investors choose to finance by paying a one-time, non-refundable fee of CAD220,000 to authorized financial intermediaries who can complete the full required investment on their behalf.
Timing of investment
While the EB-5 requires that the investment be made prior to submitting an application (or be in the process of completing the investment), Quebec only requires the investment to be transferred once and if the application is approved. Once the application is approved, the government issues an “intent to issue a Quebec selection certificate” at which point the investor has 110 days to transfer the funds.
Minimum Net Worth
There is no minimum net worth requirement for the EB-5 program. Applicants need only have sufficient funds to complete the required investment.
The QIIP requires an applicant to have a minimum net worth of CAD1.6 million. If the main applicant does not meet the minimum threshold alone, he/she may combine assets with his/her spouse to qualify. Net worth is calculated as all assets less all liabilities. Note that personal valuables such as vehicles, art work, and jewelry are not considered in asset calculations.
Source of funds
The EB-5 program requires that the source of only the investment funds (i.e. the US$500,000 investment) be proven. The funds used to make the investment must be traced from its origin all the way to transferring to the Regional Center.
The Quebec application, on the other hand, requires that an applicant prove the source of his/her net worth in its entirety. As an example, if an applicant has a net worth of CAD2 million, he/she must prove the legal accumulation of the CAD2 million, and not just the CAD800,000 required investment amount. This is often the most difficult and time consuming part of a QIIP application.
U.S. Regional Center investments must create at least 10 full-time jobs for qualifying U.S. citizens within the first two years of obtaining the U.S. conditional residency visa. The jobs can be created either directly or indirectly where jobs are created in a commercial business associated with the Regional Center invested in. After two years, if the job creation requirement is successfully achieved, conditions on the visas are removed and the investor receives unconditional permanent residency. If the jobs are not created, the immigration application is refused. Again, this is another reason why proper research must be conducted into Regional Centers prior to making any investment.
Quebec’s program is completely passive and there is no requirement to create any jobs.
There is no management experience required for the U.S. EB-5 program.
For the Quebec Investor Immigration Program, an applicant must have at least two years of qualifying management experience within five years preceding the application date. Management experience must include high-level management of financial resources, and human or material resources.
Investment visa received
The U.S. EB-5 program initially grants a conditional residence visa until the end of the two-year period when, if the 10 job requirement has been satisfied, permanent residence is granted.
The QIIP grants a Certificate of Selection from Quebec (CSQ) upon investment which is used to apply directly for Canadian permanent residence. Once a CSQ is received, the application for Canadian PR is basically health and security clearances. This part of the immigration process is required as it is the federal government that is responsible for admission to Canada.
Place of residence
EB-5 applicants can reside anywhere within the U.S.A.
Quebec applicants must prove their intention to reside in the province of Quebec. Once permanent residence is obtained, however, an applicant is free to reside in anywhere in Canada desired.
Family members included
The U.S. EB-5 program allows the inclusion of a spouse and dependent children under the age of 21 in an application.
The QIIP includes a spouse and dependent children under the age of 19.
Both the EB-5 and QIIP are among the most popular programs in today’s investment visa market. Each program has its advantages and disadvantages. While the Quebec application requires more paperwork (proving entire net worth accumulation and management experience for instance), the investment is completely backed by the government. The U.S. EB-5 program boils down to the risk of the investment. With proper research into the Regional Center, however, one can almost guarantee a successful application. At QICMS, we know the Regional Centers with proven track records that continue to help foreigners immigrate to the U.S. successfully. We can help you find a Regional Center that you are comfortable with and would not encourage investment otherwise.
Both Quebec and the U.S. offer exceptional advantages to their residents, including health, education, and social benefits. Both countries can offer a better future for you, your children, and generations to come. Which will you choose?
For more information on the U.S. EB-5 program, please click here.
For more information on the Quebec Investor Immigration Program, please click here.
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