The EB-5 “Regional Center” visa program again finds itself in an all too familiar place – unless Congress reauthorizes by September 30, the program will sunset. For better or worse, the EB-5 program remains connected with three other sun-setting immigration programs (E-Verify, Conrad and Religious Workers). AILA continues to be actively involved in the extension process and here are some updates:
Let’s start with a quick refresher. The EB-5 Immigrant Investor Visa classification has many street names, such as the “Entrepreneur” visa, the “Investor” visa and the “Jobs Creation” visa. By any name, the U.S. Congress created this program in 1990 with the goal of encouraging the infusion of foreign capital to benefit the U.S. economy. And to that end, it would offer the privilege of U.S. residency to an entrepreneur in exchange for creating 10 new jobs for American workers.
Ironically, Congress had to wait nearly 18 years to realize the major economic benefits they contemplated when enacting the EB-5 program. Why 18 years? 2008 was the beginning of the global recession which created frozen credit markets; and without access to capital, businesses could not operate. This resulted in millions of Americans losing their jobs.
With banks not lending to even the most creditworthy in 2008, the real estate industry began to embrace alternative capital sources to finance construction and development opportunities – including the heretofore underutilized EB-5 visa program.
Today, EB-5 funding is approaching mainstream recognition as a viable capital funding tool for economic development. It has helped finance large scale development projects in many major cities across the United States, including New York, Washington DC, Los Angeles, Miami, Las Vegas, and more.
Let’s just look at data from FY2014 – during this one-year period the U.S. Citizenship & Immigration Service (USCIS) approved 5,115 investor visa petitions (Form I-526). This represents foreign investment of a minimum $2.5 billion into the United States. From 2008-2014, the USCIS approved 17,000 visa petitions, representing an estimated $12 billion of capital investment into the United States.
But more than the huge inflow of capital investments, the EB-5 program is also supposed to be about jobs and job creation. According to a recent Brookings report, the EB-5 program has been credited with creating over 85,000 full-time jobs since 1990. And according to the FY2013 data, the EB-5 program has helped to create an estimated 30,000 jobs in the United States.
Almost all of this economic activity occurred since 2008 and exclusively through the EB-5 Regional Center (“RC”) Pilot Program, created in 1992.[1]
It would be logical to believe that Congress is highly pleased with the performance of the EB-5 program. It has realized its legislative intent by creating thousands of jobs for Americans and infusing billions of new dollars into the U.S. economy, all without any cost to taxpayers. In fact, one would expect broad Congressional support to expand the program. To Be Continued…
[1] Statistics published by IIUSA. www.iiusa.org
Written by David Morris and Carolyn Lee, AILA EB-5 Liaison Committee Co-Chairs
Read Part Two of this blog post and also check out this useful side-by-side chart comparing the reauthorization bills in the House.
Looking to learn more about the EB-5 program? Registration is still open for the EB-5 Investors Summit: Representing EB-5 Investors & Regional Centers August 27-28 in Las Vegas, NV!