In light of the coronavirus pandemic causing challenges in the economy, the EB-5 visa program can be a powerful tool to help stimulate economic development and create jobs. The EB-5 Immigrant Investor program is a residency-by-investment program created by congress in 1990 to stimulate the economy through the injection of foreign capital investments that are also required to generate jobs.
The foreign investments from EB-5 investors — $900,000 to $1.8 million per applicant depending on the location of the project they chose to invest in — can help fuel the market at no expense to U.S. taxpayers. More than 10,000 EB-5 investor visas are available each fiscal year to qualified applicants. Under the law, each investment must create 10 full-time jobs for American citizens or residents authorized to work in the U.S.
So far, EB-5 projects have created hundreds of thousands of jobs and brought in billions in investments. The positive economic impact of the EB-5 program — which immigrant investors can use either through a direct investment route or through an approved regional center route — was clearly shown in a recent joint study by two EB-5 trade organizations, the IIUSA and EB-5 Investment Coalition. Nearly $11 billion of capital investments in EB-5 projects through regional centers supported more than 355,000 U.S. jobs over just a two-year period.
The EB-5 Immigrant Investor program has stimulated the economy through difficult times. Following the 2008 recession, EB-5 contributed to massive job growth in the country, according to the U.S. Department of Commerce. It can do the same thing now in a time when our country is experiencing an unemployment rate of about 11%, which is about two points higher than the peak unemployment rate during the Great Recession of 2008-2009, according to the U.S. Department of Labor.
Back then, real estate developers needed to find alternative capital, and with the help of the EB-5 foreign investment, many were able to fill their capital stacks and create jobs for American workers.
President Trump’s recent executive order to halt certain immigration to the U.S. did not affect the EB-5 program. USCIS has been processing EB-5 forms I-526, I-485 and I-829 in the past few months because it does not require in-person contact, and recently the USCIS’s visa bulletin announced that Indian investors were out of the backlog. This is good news for the EB-5 market.
Even though EB-5 visas account for less than 1% of immigrant visas issued in the country, the program can have a significantly larger impact on revitalizing communities and can create work opportunities for Americans. And even though EB-5 applicants make a substantial investment, they still have to go through the same immigration process as any other immigrant entering the U.S., including background checks, security screenings, medical examinations and proving that their investment funds come from legal sources.
Despite investing hundreds of thousands of dollars and sometimes waiting years for approval, the EB-5 program does not provide a guarantee for the foreign investor to get a permanent green card. Their immigration journey can be long, especially for investors from mainland China and Vietnam who are facing a backlog of visa approvals and sometimes have to wait a decade or longer before they can reap any benefits of their investment into our economy. Their funds are also required to be “at-risk” until it's their turn in the immigration line. Despite all this, thousands of investors each year apply for EB-5 in hopes of making the American dream a reality for their families.
While the U.S. economy slowly bounces back, EB-5 can prove to be a valuable tool for fueling construction projects and forming new businesses to help with the recovery of our economy.
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