Marianas EB-5 Regional Center president Juan Carlos Benitez trumpeted the advantages of the EB-5 immigrant investor program in the CNMI as guest of the Saipan Chamber of Commerce’s monthly meeting yesterday at Pacific Islands Club.
The program was created in 1992 by Congress to stimulate the U.S. economy through job creation and capital investment by foreign investors.
Benitez, however, said the EB-5 immigrant investor program only took off during the time of President George W. Bush when the regulations for the program were finally laid out and finalized.
Under the program, which is administered by U.S. Citizenship and Immigration Service, foreign investors can obtain a green card with a minimum investment of $1 million.
However, the minimum investment for the CNMI is half that, Benitez said, since the islands is what they call a rural area and so the investment threshold is only $500,000.
Right now, Guam foreign investors need to plunk down $1 million to qualify for the EB-5 program but Benitez expects that to go down to $500,000 due to the U.S. territory’s high unemployment rate.
Aside from the lower investment threshold, Benitez said the CNMI is also ideal for investors looking to join the EB-5 program because it is the closest U.S. jurisdiction to Asia.
The CNMI is only a 30-minute flight to Guam, three hours away from Tokyo, Japan and Manila, Philippines, and a four-hour flight to Beijing and Shanghai, China and Seoul, South Korea. In addition, the CNMI is just an eight-hour flight to Hawaii via Guam and offers regular flights schedules to these destinations.
Benitez also touted the CNMI EB-5 program’s advantages vis-à-vis other such programs in the U.S. mainland.
He said the Commonwealth offers the most favorable tax environment in the entire United State. It offers the protection of the U.S. judicial system for business transactions and unrestricted capital repatriation.
Benitez said that doing business in the CNMI also allows investors to import products into the U.S. duty free. He also cited the CNMI’s tax incentives, including some for specified industries as well as access to major markets throughout Asia.
Foreign investors are also lured to the CNMI because of its political stability due to it being a commonwealth of the U.S., according to Benitez.
The islands, he said, also has the lowest effective income tax rates in the U.S. and has no estate tax in CNMI and/or worldwide assets outside of the U.S., provided CNMI permanent residents or those acquiring U.S. citizenship through CNMI residency maintain CNMI residency.
The EB-5 program in the CNMI is also ideal for foreign investors because the Commonwealth is a free trade zone and is the only location in the U.S. where Russian and Chinese nationals can travel visa free.
Another little known fact about the CNMI’s EB-5 program, Benitez said, is unlike in the U.S. where the government can seize up to 40 percent of your assets upon your death, no such provision exists in the Commonwealth and an investor’s heir can keep his or her wealth.
Aside from the obvious advantages of the EB-5 program for foreign investors, Benitez also championed how it could revive a sagging economy by providing jobs. He said one of the requirements for every $500,000 investment is the hiring of at least 10 full-time jobs for qualified U.S. workers. This job creation in turn leads to indirect job creation on the islands, which stimulate economic growth.
Benitez came to the Chamber meeting with Triple J president Bob Jones, who is a principal of the Marianas EB-5 Regional Center. Triple J has already put its Surfrider Resort Spa & Beach Club project under the program.
Jones said that his and Benitez’s Marianas EB-5 Regional Center is not allowed to solicit investment from foreign investors already on the island.
Benitez also announced during the meeting that the Marianas EB-5 Regional Center is no longer the lone EB-5 program in the CNMI as Tan Holdings’ application has also been recently approved. USCIS gave the nod to Marianas EB-5 Regional Center in January.