Tuesday, May 21, 2013

Wealthy Asians: PLEASE Read This Before Entering the US as an EB-5 Conditional Resident

Between the greedy US developers, the greedy US lawyers out to make a quick I-526 buck and the greedy Asian migration agents, affluent folks from all over the Far East are being led down the primrose lane to US tax poverty.  Today is Tuesday and in two business days this week, I have personally spoken with three high net worth individuals who have been told by all of the above that "the EB-5 is your best option".

Horsefeathers!

Here's the deal: 

1) US tax residency is based upon physical presence in the US, not migration status; the only individuals exempt from the "substantial presence" test are bona fide full time F-1 student visa holders...not a practical solution for most entrepreneurs.  See the The IRS Substantial Presence Test if you want details.  Even a person in the US for just casual travel becomes liable for worldwide income, capital gain, and estate taxes if they meet this threshold.

2) The vast majority of EB-5 investors from Asia aren't interested in full-time migration to the US but are talked into it.  In most cases -- and forgive the sexist stereotype but, realistically, the investor is the husband not the wife in 90+% of EB-5 situations -- it is best to have Mrs. Investor and children secure EB-5 status while Dad hangs on to his B-1 visa and counts his days in the US.

Please please please do your homework and find an honest US attorney before making the leap to a US green card and global taxation.  There are still a waning handful of honest US attorneys who can wisely advise you regarding your pre-immigration tax options, offshore trust mechanisms, and lawful insulation from the consequences of global taxation...before you sign on the dotted line.  BE CAREFUL OUT THERE!

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