The EB-5 Investor Visa was created by an act of Congress in 1993, and it has proved to be a critical driver in American job creation since its inception.
By some estimates, the program has brought in over $20.6 billion in Foreign Direct Investment (FDI) at no cost to the American taxpayer. The program has undergone a series of drastic changes since November 21, 2019; most significantly the minimum investment amount was increased from $500,000 to $900,000. The minimum investment amount is even higher in non-Targeted Employment Areas ($1.8 million).
With the increase in investment amount, interest in the visa declined significantly. This decline in interest, coupled with a new USCIS policy that led to petitions being adjudicated based on a visa availability approach (as opposed to a first-in, first-out approach) is reflected in the visa bulletin; India is now current in the EB-5 category, and Vietnam and China have progressed significantly.
As the United States looks for options to spur economic recovery in the wake of the COVID-19 pandemic, the EB-5 program, with its job creation requirements, seems like a logical option. However, recent developments have put the program at risk.
EB-5 Authorization
Traditionally, the EB-5 regional center program has been tied to Congress’ omnibus spending bill. This means that whenever Congress passes the omnibus bill, the EB-5 regional center program would automatically be re-authorized. While the Consolidated Appropriations Act of 2021 extended the program through June 30, 2021, it disjointed EB-5 re-authorization from future omnibus bills. This means that Congress must re-authorize the EB-5 regional center program as a standalone bill.
While the benefits of the programs are well known, the EB-5 program has undergone considerable media coverage. Anti-immigration rhetoric is also playing a part in the discussion. Together, this makes EB-5 re-authorization in June 2021 uncertain.
The EB-5 Reform and Integrity Act
Senators Chuck Grassley (R-IA) and Patrick Leahy (D-VT) have introduced the EB-5 Reform and Integrity Act. The bill provides for some crucial changes that would likely safeguard the EB-5 program’s longevity. This includes a five-year authorization for the EB-5 Regional Center Program, protections for innocent investors who have invested into disbarred projects, and increased oversight for regional center programs. The EB-5 industry has welcomed the bill, with the understanding that increased oversight will lend more credibility to the program and appease the program’s detractors. The economic effects of the COVID-19 pandemic provide compelling grounds for both re-authorization and reforms, and the program has brought in billions of dollars of investment and created thousands of American jobs