*Content brought to you by LCR Capital, a partner-owned, private equity investment firm that affords High Net Worth (HNW) individuals the opportunity to become US citizens by investing into US-based businesses.
Gaining popularity among emerging markets, only 10 000 EB-5s are made available per annum world-wide by the US Government. Douglas van der Merwe, LCR Capital’s local representative says, “The US immigration system has traditionally not been an ideal fit for South African businessmen and investors who want to relocate to the US. Many countries have investment treaties that enable their nationals to obtain treaty investor visa status and immigrate to the US based upon their investments. South Africa does not.
Fortunately there is a solution for wealthy South Africans in the form of the EB-5.” Popular in Asia, the EB-5 visa programme allows investors who want to relocate their family to the US, or to provide their children education or job opportunities in the US, to obtain a green card.
If approved they’ll receive a temporary US green card within 12 – 18 months and a permanent one two to three years later. “Investors can immigrate, buy property, set-up a business and send their children to top schools and universities across the country at reduced ‘in-state’ tuition fees. They may also qualify for merit-based scholarships and awards reserved for U.S. residents and citizens,” explains van der Merwe.
The $500k investment, which must be for a minimum of 5 years, after which it is redeemed with interest, is in the form of a limited partnership investment that will in turn provide senior secured loans to partially finance the construction of new Dunkin’ Donuts restaurants in the US. Dunkin Donuts is a quick service restaurant chain that mainly sells coffee (second only to Starbucks in the US). The company has representation in 36 countries and plans to launch in Cape Town and Johannesburg later this year.
“The 60 year old, US listed Dunkin’ Donuts is the seventh largest restaurant chain in the United States,” says van der Merwe. “With 8,000 stores in the US alone and 11 000 worldwide, it is a defensible, established and sustainable business model. Investors’ funds will assist Dunkin’ Donuts with future expansion plans across the south of the US.”
The EB-5 program is one of the few supported by both US political parties as it creates jobs for US workers at no expense to the taxpayer. “For many international investors, obtaining a green card through the program makes it possible for them to travel more freely and present a hedge against political or financial turmoil back home as well as provides an avenue for their children to gain access to US colleges,” explains van der Merwe. Investment immigration programmes have become popular in South Africa in recent years with Malta, Cyprus, Portugal and Dominica, among others, offering programmes to acquire foreign passports.
Investment amounts range between Euro 150,000 up to Euro 5-million and can be used to invest in government bonds, property or local enterprise, depending on the country.
While purchasing a US green card is relatively “affordable” against other countries’ requirements, its minimum investment is likely to increase significantly in early 2017. “If investors are considering permanent residency in the US, it is advised to apply and get started on the EB-5 application process before the $500k amount changes,” suggests van der Merwe.
Launched in 2012, LCR Capital assists high-net worth clients in emerging markets, including Brazil, China and India, acquire US permanent residency through the facilitation of the EB-5 programme. Its senior management team has an established track record having served at many of the world’s premier organisations: McKinsey & Co, Credit Suisse, UBS and the US. Congress, among others.