The EB-5 visa, operated by United States Citizenship and Immigration Services (USCIS), is a route to green card and permanent residency for foreign nationals in the USA through investment. This program allows foreigners investing in a U.S. business to acquire a green card and become lawful permanent residents, and gradually, citizens of the United States. The investment would not only lead to the investors obtaining a green card and to permanently live and work in the United States but also allow their spouse and unmarried children under the age of 21.
Under this Program, the foreign nationals are expected to invest in a new commercial enterprise in the United States. To obtain the EB-5 visa, individuals must invest $1,000,000 or $1,800,000 after Nov 21, 2019 (or at least $500,000 or $900,000 in a Targeted Employment Area – high unemployment or rural area), creating minimum 10 jobs for the US workers, other than members of the investor’s family.
History of EB-5
EB-5 visa has a long history, as the Program was first introduced in 1990. Since then, there have been various changes in its form.
1990-1999
Through the Immigration Act of 1990 Investor VISA Program, Congress created the employment-based fifth preference category (EB-5 visa) program in 1990. The main objective of the program was to create jobs for U.S. workers and to allow additional capital in the U.S. economy through investments. In the beginning this program was tailored for the “alien entrepreneurs” who were to invest $1 million or $500,000 in a new commercial enterprise in the US. These entrepreneurs were also expected to engage in the management of these enterprises and create ten jobs for U.S. citizens.
Furthermore, to make the program more investor-friendly the Congress enacted the 1993 Appropriations Act which amended the EB-5 visa program to create the Pilot Immigration Program — the Immigrant Investor Pilot Program (IIPP). Under this, foreign nationals could invest in a pre-approved regional center, which is involved with the endorsing of various aspects of economic growth – increased export sales, improved regional productivity, job creation, and increased domestic capital investment. Investments within a regional center gave foreign nationals the benefit to count both direct and indirect jobs created for meeting the 10-job creation criteria. This was intended to help potential investors to meet the program’s requirements. This made EB-5 an investor-friendly visa.
2000-2009
According to a Brookings Institution and Rockefeller Foundation 2014 report, there was a renewed interest in the EB-5 visa program around 2008 which was considered under-utilised till then. This was the result of the decrease in the traditional domestic financing in the USA due to the Great Recession in the USA, and an increase in the wealthy investors and ultra-wealthy individuals in emerging markets abroad.
2010-2019
Due to the low interest in the program, USCIS in 2011 started making changes to the program to attract more applicants. By the end of 2011, more than 3,800 EB-5 visa applications had been filed, in comparison to less than 800 applications in 2007.
The program reached capacity in August 2014 when the State Department stopped issuing EB-5 visas until the beginning of the next fiscal year, October 2014. By 2014, the number of EB-5 visas granted had more than doubled since 2009.
In 2019, the US Congress extended the program with new rules. The new rules increased the investment amount from $1 million to $1.8 million, from $500K to $900K in Targeted Employment Areas.
Under the Pilot Program, investments can be made directly in a job-generating commercial enterprise (new, or existing), or into a regional center – a 3rd party-managed investment vehicle (private or public), which assumes the responsibility of creating the requisite jobs.
Researchers at Western Washington University have found the EB-5 visa program has generated more than $11.2 billion in capital investment between 2014 and 2015 for development projects across the country. It also created more than 207,000 U.S. jobs — or 4% of the private sector job growth between 2014 and 2015 — and added more than $33 billion to the gross domestic product and $4 billion in tax revenues.
Barron’s also reported that the program generated around $5 billion a year for 10,000 visas.
There are various projects which are financed with EB-5 visa investments. These include, Hilton, Hyatt Hotels, Marriott’s, Starwood’s SLS Hotel & Casino. Further, Hudson Yards, Manhattan is another example. In southern California, Europa Village, in Temecula, the Hilton Garden Inn in El Monte, and the JW Marriott hotel at L.A., Live in downtown Los Angeles are financed using the EB-5 investments. Another major infrastructure project in the EB-5 program is the I-95/Pennsylvania Turnpike connector.
To apply for the EB-5 visa, potential investors must file a I-526 petition to the U.S. Citizenship and Immigration Services. If this is approved, the investor applies to the State Department for the visa. Once an investment project meets the requirements, the investor gets a green card. This process can take up to 2 years. The government has limited the number of green cards awarded under the program at 10,000 each fiscal year. No more than 7% of that total may come from any one country. The investor’s spouse and unmarried children under 21 years of age are also eligible for residency under the program.
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