The L.A. Times recently described Detroit post-bankruptcy as a “land of opportunity.” Yes, the city’s known some of the toughest times, but it is emerging from bankruptcy leaner and better able to compete on the national and global stage. Today’s Detroit has a new resolve, a strong commitment by the business community, a building momentum emanating from the city’s core, and a tremendous upside. The potential to reshape the future is palpable here, and an investment in Detroit, could be a very savvy business decision, especially in the long term.
Of the many opportunities in the new Detroit, two stand out for internationals: the EB-5 Investor Visa Program, and the concept of Nearshoring.
EB-5 Investor Visa
The EB-5 investor visa program is a tool that allows foreign investors who invest $1 million in an American business that creates 10 jobs to receive permanent legal residency for themselves and their immediate family. Pre-approved regional centers, such as the State of Michigan EB-5 Regional Center, can help pool EB-5 investments, lower the investment threshold to $500,000 per investor, and identify key investment opportunities and industry sectors for growth.
If the investment occurs within many areas of Metro Detroit, including Detroit proper, the necessary capital outlay is only $500,000, since most of the region qualifies as a Targeted Employment Area (TEA), an area where there has been unemployment of at least 150% of the national average rate (as designated by Office of Management and Budget). This opportunity positions Detroit well for investors who are interested in growing a business in the context of a global manufacturing and technology center, but don’t necessarily have access to the capital traditionally association with EB-5 investments.
As of October 2014, there are a total of 10 EB-5 investor visa regional centers that have been pre-approved by the federal government.
Nearshoring refers to the practice of attracting global businesses to nearby Canadian or Mexican cities when the businesses’ ability to grow and expand is otherwise hindered by restrictive U.S. immigration laws. Global firms, particularly in industries critical to the new economy, can face significant hurdles to engaging the world’s most talented workers because of restrictive U.S. immigration laws. Since the H-1B skilled worker visa cap was rolled back to 65,000, the demand by U.S. firms for these visas has far exceeded the supply, usually surpassing the cap only days after the application period is opened. As a result, U.S. firms have been forced to locate facilities in other countries where immigration laws allow them to hire such workers. In 2007, Microsoft, for instance, opened its new software development center in Vancouver and pointed to restrictive U.S. immigration laws as the cause of locating such a facility outside the U.S.
Global Detroit advocates for a more strategic plan for Detroit and Windsor, Ontario to work together as partners to aggressively recruit firms that want to expand operations in the U.S., but who are restrained by our immigration caps on skilled international workers. Detroit-Windsor can become the leading “nearshoring” base for the new economy. Global firms can locate their skilled foreign labor in Windsor, while bringing their American workers to metro Detroit. In addition to our regional proximity (which literally allows workers to meet face-to-face with their peers in another country in 30 minutes or less), southeast Michigan and southwest Ontario possess a bi-national business acumen developed over years of cooperative work on automotive manufacturing and other industries.
LA Times Move to Detroit, land of opportunity, August 09, 2013, Alexandra Le Tellier