IIUSA has published an article about the Russian EB-5 market. While this region has its challenges, it represents great potential with 246,000 millionaires (U.S. dollars). And despite political tensions between the two countries, more Russians are interested in U.S. immigration than ever — participants in the U.S. diversity lottery rose 63% between 2015 and 2019.
IIUSA’s report written by migration professional Varvara Latyntseva who works in Russia offers some interesting insights about Russian interest in U.S. immigration and the country’s availability of potential investors.
First, looking at the number of high-net-worth individuals in Russia (based on the Global Wealth Credit Suisse report in 2019) we see that out of Russian’s population of 144 million, the country had 246,000 U.S. dollar millionaires. That’s one millionaire for every 585 people. As a point of comparison, India in 2019 had 759,000 U.S. dollar millionaires, despite having over nine times the population; India has one millionaire for every 1,793 people.
One doesn’t have to be a political news junkie to know that relations between Russia and the U.S. have been far from ideal. Yet, despite this (or, perhaps even because of the state of Russian politics) the interest of Russian nationals in the U.S. has been increasing. More Russians received U.S. permanent residency in 2019 than in any other year the past decade. Another worthwhile indicator of Russian interest in the U.S. is participation in the U.S. diversity visa lottery; Russian activity leaped 63% from 265,086 participants in 2015 to 332,069 in 2018 for the lottery. Clearly, many Russians want to live in the U.S. — and that number is growing.
The EB-5 program’s past reliance on Chinese, Vietnamese and Indian investors has left other markets like Russia largely untapped. The low Russian EB-5 numbers have also been a result of the particular challenges of the Russian market.
First, organizations looking to find Russian investors will want someone who can speak Russian. And they will need to commit a significant amount of time to this endeavor in order to educate a population that has bought into many myths about EB-5 and is need of accurate information. And if located outside of Moscow and St. Petersburg, — the most affluent cities with the highest number of English speakers — English won’t be as prevalent.
False assumptions about the program in Russia include the idea that investors won’t have their capital returned; purchasing property in the U.S. is enough to get a Green Card; regional centers are not trustworthy. Bad press and suspect migration agencies have contributed to this negative and sometimes uninformed perspectives of the program.
Further, EB-5 is more complicated than other immigration by investment programs that have been popular with Russians — those offered by Malta, the UK, Spain, and Cyprus, for example. Russian investors will require more time and education to understand EB-5 and be comfortable with the process and risk involved.
In the quest for Russian investors, EB-5 stakeholders will find that many big Russian firms who work in EB-5 may prefer to rely on Russian consultants rather than foreign ones. Smaller Russian organizations — migration agencies, banks, lawyers, accountants, real estate firms — will be much more open to working with U.S. partners.
Note that historically many Russian investors have used U.S. immigration lawyers to find an investment project, — a less than ideal situation given that most immigration lawyers are not qualified to be investment advisors (and many of them probably don’t want the liability associated with such a practice).
The greatest number of high-net-worth Russians reside in Moscow and St. Petersburg, as those cities have the highest standards of living, making it possibly more difficult to sell nationals there on the idea of moving to the U.S. But potential investors in other cities may be harder to reach if travelling, as the country is so vast and heavily populated areas are very spread out.
The statistics tell us that Russia has nationals with money. And a huge appetite for U.S. migration. But the world’s biggest country also comes with challenges, most notably with education and language. For those EB-5 professionals willing to invest their time and effort in the world’s biggest country, Russian investors could become avery worthwhile ROI.
Read the IIUSA article “Insights Into the Russian Investor Market from An Agent on the Ground”
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