Pres. Trump wants to sell 1 million “golden visas” for $5 million apiece to solve the US budget deficit problem.
Delusional. I hope that President Trump is adviced by people who actually understand the reality of this unique intersection of economics, finance, and immigration.
This needs to be looked at annually, instead of loosely without a timeframe. With a price tag of $5 million, it is realistic to have 1000 buyers of this golden visa every year. Any number higher than that is going to be a stretch. But let’s just optimistically assume that there are 1000-5,000 buyers every year; that would be $5 billion-$25 billion annually.
The US federal annual budget deficit is near $2 trillion! And that’s annual. The timeframe is of the essence.
I have solid data and experience to support the above estimates. Most of our consulting firm’s clients are high net-worth families, and many of them are immigrants to the US through investment.
I talk to people who have net assets above $100 million, and their reaction to hearing this is all along this line: “Wow, that makes the current EB5 so much more attractive.”
Sure, Trump wants to end the EB5 program. However, it is one thing for the executive branch to start a new visa; it is quite another to put aside existing law. EB5 is based on long-standing legislation. Not that I think the EB5 program is genius (see below), but abolishing EB5 can’t simply come out of the mouth of the president.
I skimmed over the discussions on X.com, and have to say, I have not seen a single comment that shows real knowledge of the investment immigration programs.
Let me highlight a few points:
(1) First, Trump’s golden visa is not an investment visa program. It is not an investment. It is a straight merchandise purchase. People here talk about the investment immigration programs of other countries or regions, such as the UK and Hong Kong. But those programs are very different. They are investments, not purchases. In Hong Kong’s case, it is not even targeted investment, but just as simple as buying stocks, bonds, and real estate in Hong Kong. They are entirely different.
(2) The current US investment immigration program EB5 requires an investment of $800,000 or $1.05 million (depending on the investment target area). It’s an investment, not a purchase. It is at risk, for sure, but it is an investment, not a straight purchase ticket. However, even at this low threshold, the program is struggling to attract more than 5000 applicants globally every year. (At its peak about seven years ago, it attracted close to 10,000 applicants a year, nearly 80% of them from China, but that’s when the investment requirement was $500,000, and there wasn’t a visa number waiting line for the Chinese investors.)
(3) However, the EB5 program itself is idiotic because everything was designed with a superficial political goal (to satisfy politicians’ needs for either public appeal or private sponsorship), which contradicts business logic. As a result, a majority of EB-5 projects are not created because they make economic sense, but because organizers are allured by the easy money that can be made from the EB5 investments. In the entrepreneurial space, easy money usually distorts the business reality and always leads to corruption. (And the same is true, if not even more true, in politics.)
(4) Nevertheless, Trump’s golden visa and EB5 cannot be directly compared because they’re different in nature, qualitatively, not merely quantitatively. As a direct purchase, the golden visa also has its perks. Presumably, once the buyer is properly vetted (how far the US will go doing that is a different story), you have a speedy process with certainty. In comparison, the EB5 program currently suffers about 30%-40% failure rate and a prolonged approval process, which can run over 4 years for most people and over 10 years for Chinese nationals. So, in this sense, a straight purchase of a golden visa may have some extra appeal. But still, 1 million buyers?
(5) The US immigration policy has historically attracted people who seek freedom and are entrepreneurial. It is essentially an invitation for people to bid on opportunities with their energy and creativity. It is really a hidden test to prove people. The Biden administration destroyed the test by having an open border. Now, the Trump administration seems to be willing to destroy it from the opposite side, viewing it as a pure mercenary business. It’s no longer a drive for diligence, entrepreneurship, and creativity to build a strong nation but to put for sale the value of the nation that previous generations created and accumulated in the past.
Rome was strong when soldiers had to be brave and loyal to earn citizenship. Its end came when it started to sell citizenship straight. Not that selling citizenship caused Rome to fall. It was the weakening of Rome that made selling citizenship necessary.
What is the weakness of the US today? You can start with the $36 trillion debt and $2 trillion annual deficits. But there’s much more. With this view, I am also sympathetic to Trump.
But promoting mercenary programs like this does not solve the problem. It may bring an opposite effect. It offers a false hope to Americans. The nation, not only its government, but more importantly its people, need to face the reality. Place not our hope on easy political fixes. Get serious and get disciplined, turn to the true source of creative and positive energy, worship God not idols, take care of yourself and your neighbors. That’s the only hope, but it is hope.