A stopgap funding bill passed by Congress April 28 to provide funds for the US government to continue operating has given the EB-5 investor visa program a new lease on life and set the stage for potential reforms.
The decision by Congress to extend the program in its current form through September 30, 2017, is being accompanied by a flurry of proposals for reforming its minimum investment amounts, stricter oversight and reclassification of targeted employment areas (TEAs), and visa-processing inefficiencies. Congressional reform also wanted to address the minimum investments amounts that must be made to qualify for the program.
While various proposals are being floated by members of both parties, the US Citizenship and Immigration Services continues to accept Form I-526 petitions based on investments through EB-5 regional centers through that date.
Under the EB-5 program, entrepreneurs (and their spouses and unmarried children under 21) are eligible to apply for a green card (permanent residence) if they meet two requirements: make the necessary investment in a commercial enterprise in the United States and plan to create or preserve 10 permanent full-time jobs for qualified US workers.
But it has evolved since Congress created the program in 1990 to stimulate the US economy through job creation and capital investment by foreign investors. In 1992, Congress created the Immigrant Investor Program, also known as the Regional Center Program. This sets aside EB-5 visas for participants who invest in commercial enterprises associated with regional centers, or targeted employment areas, as approved by USCIS based on proposals for promoting economic growth.
Behind the scenes, the National Law Review reports, members of Congress and their staffs are negotiating an EB-5 reform package to include in the larger funding bill. The key issues being discussed are raising the minimum investment amount from the current $500,000; revising the definition of a “targeted employment area” to allow certain investments at the minimum investment level; establishing visa “set-asides” for investments in certain rural and blighted urban areas; and establishing effective dates for any changes.
According to a real estate industry publication, there are about 22,000 EB-5 immigration visas waiting to be approved. Getting the needed documentation and security approvals can take up to 16 months, but it is expected to take even longer as applicants have to be vetted in order to become residents.
But the concept of “citizenship by investment” is not clear cut. Micha Emmett, CEO of CS Global, a legal consultancy firm with expertise in citizenship and foreign direct investment, called the EB-5 program “the insurance policy of the 21st century.”
Emmett said “immigrants are responsible for building the USA, and this story applies to many other countries in the world. Being fearful of immigrants is not conducive to growth.”
But she also said that as a professional in investor immigration, “I feel the program, as it currently exists, is flawed and requires tighter regulation and vetting of both the applicants and the investors creating the investment program.
“As countries face fiscal challenges, governments are seeking ways to attract human capital to their country as a way to stimulate their economies. Despite the ailing EB-5 industry that has been fraught with allegations of fraud, the program has provided a platform for foreign investment to be utilized to redevelop certain regional centers by building schools, hotels, etc.”
Emmett added that “citizenship or residence by investment programs, if properly developed and implemented, can be hugely beneficial for countries because they generate revenue for the government without needing to heavily tax their citizens. If properly structured, programs can contribute to infrastructure and social programs.”