Would You Pay $5 Million to Move to America?

You might have heard news reports by now that President Trump is planning to cancel the existing EB5 investment visa and launch a new “Gold Card.” Although It’s not immediately relevant to anybody who might be looking to move out of the US—like Field Notes readers—it does say a lot about how the “investment migration” industry is developing.

Trump’s Gold Card proposal is very different from the existing EB5 visa. Whereas the latter is awarded to people who invest a minimum of $800,000 in businesses with the potential for job creation, the Gold Card simply requires that the applicant pay the US Treasury $5 million. There doesn’t appear to be any requirement for job creation.

My first reaction when I heard of Trump’s proposal was that this was essentially a Golden Visa for the United States. But while giving money to a country’s government is one of the options for some Golden Visas, in most cases countries prefer an investment in property, business, bank deposits, or something that will grow the economy.

The Gold Card is a way to sell US residency rights to raise money. In fact, that’s how Commerce Secretary Howard Lutnick is pitching it… as a way to plug the US’s massive deficit hole.

From a strictly constitutional perspective, it’s not clear that Trump can do this on his own. The EB5 visa was created by Congress, and Congress would need to agree to end that program and authorize the new one.

But regardless of how things turn out, Trump’s proposal puts a big stamp of approval on the concept of Golden Visas in general.

In recent years investment-based visas have come under fire in Europe in particular, for creating security and money laundering risks, and for pushing up housing prices both through property investment and through demand from wealthy new residents. Previous US administrations have also expressed concerns about security risks and have sometimes cancelled visa-free travel privileges from countries that issue such visas.

Trump is embracing not just the Golden Visa concept but rejecting the security concerns that European countries and previous US administrations have expressed. When asked if he would be prepared to sell residency to Russians—currently locked out of practically every investment program in the world—he commented that “some Russian oligarchs… are very nice people.”

A US Gold Card program could have unforeseen impacts on other countries’ residency programs. Historically, the biggest consumers of European Golden Visas have been wealthy Chinese. If they are now drawn to the US, it could relieve pressure on those programs from locals concerned about being crowded out of housing markets.

On the other hand, if security-conscious EU countries think undesirable travelers might use a US backdoor to get into the EU, they could potentially rescind the visa-free status US passport holders currently enjoy there. Trump’s proposal touts a five-year pathway to citizenship, so citizens of countries on the EU’s visa list could enter the area on US passports.

From a broader perspective, trump’s proposal is remarkable in that it puts the United States in the same category as countries that have chosen to sell residency rights to beef up their economies and fill government coffers. Traditionally, only countries facing slow growth and low average incomes have gone this route.

With the world’s richest and most powerful country doing the same, it may relieve a lot of the stigma—or do precisely the opposite.

As always, I’ll keep a close eye on developments here, and let you know what impact it’s having on investment migration around the world.