For more than two decades, the EB-5 investor visa program has benefitted U.S.-based businesses as well as international investors. It’s created tens of thousands of jobs here in the United States. It’s also been criticized for a number of reasons. Congressional authorization for the EB-5 program is scheduled to expire in 2016 at the end of the fiscal year on September 30. Hopefully, Congress will act to protect and strengthen the EB-5 program and safeguard its ongoing success.
With the September 30 deadline rapidly approaching, international investors who would like to learn more about the EB-5 investor visa program and about the variety of investment opportunities in the United States may want to speak right away with an experienced Ohio immigration attorney. Congress will almost certainly renew the EB-5 program this year, but the lawmakers will also almost certainly make some important changes. The $500,000 minimum investment level may increase, the definition of a Targeted Employment Area will likely change, and there will almost certainly be new requirements for participating investors.
Business groups including the U.S. Chamber of Commerce, the Real Estate Roundtable, the American Immigration Lawyers Association, and others have joined in a coalition urging Congress to renew – permanently – the often-controversial EB-5 investor visa program before it expires in September. In July, the coalition called on lawmakers to renew the EB-5 investor visa program with additional security measures, adjustments to the controversial investment incentives, and streamlined processing of visa requests.
WHAT DOES THE EB-5 INVESTOR VISA PROGRAM OFFER?
The EB-5 investor visa program promises international investors in the United States eventual lawful resident status and an opportunity for naturalized citizenship. In a letter to both the House and Senate Judiciary committees, the coalition wrote that “Congress must not let this important job-creating program lapse, in large measure because of the immediate negative consequences to U.S. businesses and projects counting on EB-5 investment to create jobs for Americans.”
The coalition’s July letter also mentions that the EB-5 investor visa program was responsible for more than $15 billion in investment and for creating approximately 100,000 jobs between 2005 and 2010. Some critics, however, allege that the EB-5 program is riddled with fraud, and others charge that the current operation of the program fails to meet the goal of reinvigorating economically depressed communities and regions. There’s wide agreement in Congress that additional security measures and some adjustments to the program are needed. Several lawmakers have even proposed the creation of a new “EB-6” visa.
The most acrimonious aspect of the EB-5 debate regards investments in economically depressed areas designated as Targeted Investment Areas (TEAs). Critics charge that wealthy real estate developers have unfairly taken advantage of the lower investment minimum required for TEAs, and that rural and depressed regions are not obtaining the benefits from the EB-5 program that they’ve been promised.
The coalition of business groups did not offer a specific proposal for new EB-5 legislation, but they want to reduce the gap between TEA and non-TEA minimum investment requirements. Their July letter to the two Judiciary committees says, “Lawmakers and stakeholders with diverse perspectives should all be involved to build consensus and forge a compromise reform package.”
HOW HAS THE EB-5 PROGRAM BENEFITTED THE UNITED STATES?
Since the recession, the EB-5 investor visa program has emerged as a popular source of investment funds, particularly for real estate development projects. In the nation’s capital alone, EB-5 investors have put up more than $110 million and created more than 1,500 jobs. In 2013, about 85 percent of the EB-5 visas issued went to investors from China, with the others were spread among investors mostly from Japan, Great Britain, Russia, and South Korea.
Congress wants to tighten oversight of the popular program, so a number of changes to the EB-5 have been offered by lawmakers. The ideas include increasing the minimum investment, not counting derivative visas toward the annual cap of 10,000 EB-5 visas, and heightened scrutiny of applications and investments. The variety of proposals proves how important the EB-5 program is to the U.S. and to its job creation and economic growth. Between 2005 and 2013, the EB-5 program brought roughly $5.2 billion investment dollars directly into the United States.
Under the current regulations, an international investor seeking to obtain an EB-5 visa must invest at least $1 million – or at least $500,000 in a TEA – in a new business that will create ten or more full-time U.S.-based jobs. The EB-5 program additionally offers participating international investors and their immediate families the benefits of lawful permanent residency in the United States.
WHAT IS REQUIRED TO PARTICIPATE IN THE EB-5 PROGRAM?
To participate in the EB-5 investor visa program, investors must go through a process which determines that they are admissible to the United States as well as eligible for the EB-5 visa. It begins with the filing of an eligibility petition. For the EB-5 visa, this is the I-526 petition, which asks about the source of the investor’s funds and how he or she intends to invest those funds. Upon approval of the eligibility petition, if the investor now lives outside the of the U.S., he or she must submit a visa application to the U.S. Department of State, and a consular affairs officer at a U.S. Embassy or Consulate eventually determines if the investor is admissible.
If the investor is in the United States with another visa, an application for adjustment of status must be submitted to the U.S. Citizenship and Immigration Services (USCIS). USCIS conducts background checks and may ask the applicant for a personal interview. USCIS may also be assisted by the State Department or other federal government agencies when conducting background checks of EB-5 applicants.
If the investor is admissible, a conditional visa will be issued that allows the investor to reside for two years in the United States. Prior to the conclusion of that two-year period, the EB-5 investment must create at least ten full-time U.S.-based jobs. If all of the other requirements of the EB-5 investor visa program have been satisfied in the two-year period, the investor obtains lawful permanent resident status.
International investors should also speak with an Ohio immigration attorney about two additional immigration options apart from the EB-5 program: the E-2 visa program, which requires a “significant” investment and does not provide the investor with a green card, and the EB-1(c) visa, which requires an applicant to be sponsored by a qualifying employer. Immigration is complicated, and obtaining an investor visa takes some persistence, but in the end, international investors are almost always quite pleased.