Guam participates in several U.S. federal government initiated economic incentives, such as the Guam Foreign Investment Equity Act, the Immigrant Investor Visa Program, and the “Guam Only” Visa Waiver Program.
Guam Foreign Investment Equity Act
Under the U.S. Internal Revenue Code, there is a standard 30 percent state income tax rate for foreign investors in the United States. It is common feature of tax treaties negotiated by the U.S. to provide for lower tax rates on the investment income derived from treaty countries investments in the U.S.
Since Guam’s territorial tax law mirrors the rates established under the U.S. Code, the territorial income tax rate for foreign investors in Guam is 30 percent. Foreign investors fund 75 percent of Guam’s commercial development and the passage of the Guam Foreign Investment Equity Act is an important economic incentive to Guam.
The Guam Foreign Investment Equity Act, Public Law 107-212 was signed into law by President George Bush on August 21, 2002 and amends the Organic Act of Guam to provide the Government of Guam with the authority to tax foreign investors, at the same rates that the 50 U.S. states currently are able to access relative to existing tax treaties with certain foreign nations.
As an example, under a treaty with Japan, the rate at which states may tax Japanese investors is 10 percent. That means that a Japanese investor’s income would also be taxed at a rate of 10 percent in Guam as in any of the fifty U.S. states.
Immigrant Investor Visa Program
An Investor Visa category that has attracted the attention of many prospective immigrants is the EB-5 Investor Visa created under the Immigration Act of 1990. This Visa category allows qualified foreign nationals to obtain lawful Permanent Resident Status (Green Cards) through investment in a U.S. enterprise. Ten thousand (10,000) Immigrant Visas are available each year to foreign investors establishing a “new commercial enterprise” or are in the process of investing in an existing enterprise on Guam.
A “new commercial enterprise” is any lawful, for-profit business established after November 29, 1990. Both the creation of a new business, and the purchase and re-capitalization or reorganization of an existing business is allowed.
The minimum investment in the fifty United States and U.S. territories such as Guam is $900,000 USD, with the exception of the villages of Yigo and Dededo. The investment instruments required for Guam may include legally obtained cash, equipment, inventory, or other tangible property, and cash equivalents, such as: certificates of deposit, Treasury bonds, and other instruments, which are easily converted into cash.
The primary focus of the program is the creation of employment. Employment must be created within 2-year time frame. Enterprise creates at least 10 full-time jobs for U.S. citizens, permanent residents, exclusive of Investor’s spouse and children. “Full-time employment” is defined as employment in a position requiring a minimum of thirty-five (35) working hours per week.
The commercial enterprise may be a sole proprietorship, limited or general partnership, joint venture, corporation, business trust, or any other publicly or privately owned business. Non-commercial activities, such as owning a personal residence, do not apply.
An EB-5 Visa can be obtained without a regional center. The disadvantage is that the project must create 10 direct jobs. If done in conjunction with a regional center, then the 10 jobs can be direct, indirect and induced.
Multiple Investors are permissible, provided each Investor seeking a visa has invested the $900,000 required amount and created the required number of full-time positions.
Investor personally manages the investment either through exercising day-to- day managerial control or through policy formulation and direction.
Guam-CNMI Visa Waiver Program
A noncitizen may be admitted into Guam or the CNMI under the current Guam-CNMI Visa Waiver Program if the noncitizen:
*To be eligible to participate in the program as a result of a connection to Hong Kong, the following documentation is required: a Hong Kong Special Administrative Region (SAR) passport with a Hong Kong Identification Card; or a British National (Overseas) (BN(O)) passport with a Hong Kong Identification Card.
*To be eligible to participate in the program as a result of a connection to Taiwan, one must be a resident of Taiwan who begins his or her travel in Taiwan and who travels on direct flights from Taiwan to Guam or the CNMI without an intermediate layover or stop, except that the flights may stop in a territory of the United States (en route);
*The list of countries can change, so it is crucial to check the current list of eligible countries on the U.S. Department of State website