In 1990 Congress created the employment-based fifth preference visa category (EB-5) category for foreigners seeking to invest in a business that will benefit the US economy and create or preserve at least 10 full-time jobs for qualified US workers. The amount required to invest is $1 million or $500,000 if the investment is made in a high unemployment or rural area.
Some portray the typical EB-5 investor as an ultra-rich Chinese businessman in the market for a prestigious US green card. One restrictionist group describes EB-5 as a “tacky, troubled program that doesn’t do much for economic development.” Others say the EB-5 program “let[s] the guys in with the money and leave[s] the best and brightest waiting in line.” Meanwhile, participants in the program have their own criticisms, alleging that US Citizenship and Immigration Services (USCIS) is hostile toward EB-5 because it is viewed as a “green card for sale” program that denigrates the US immigration system, and is essentially bad for America.
A fundamental tenet of the EB-5 program is job creation, which is often minimized by program critics. There are economic citizenship programs available in some countries through which an individual can buy a passport for a price. However, the EB-5 program requires much more in that the investment required to put one on the path to permanent residency must, amongst other things, create jobs and be at risk. As such, the “green card for sale” concept is flawed and oversimplifies the EB-5 process.
According to statistics published by IIUSA, the industry trade association for the EB-5 Regional Center Program, almost 100,000 jobs have been created for US workers through the EB-5 program, with nearly $5 billion in capital infused into job creating enterprises in the United States since 2005. These figures should be viewed against an increasingly common backdrop of outsourcing and offshore back-office operations. Should we not welcome a program that creates US jobs and infuses a lagging economy with much needed capital? Already, the US must compete with investor programs that are more attractive due to better administration and less stringent requirements. Although some of these programs are more expensive, they can offer passive investment opportunities and shorter processing times with a higher degree of certainty that the investor will achieve his or her goal of residency.
Yes, the EB-5 program has endured fraud and abuse, but scams and deception are not unique to EB-5. Yes, some Regional Centers have failed to deliver on their promises, and investors and projects have suffered. However, the need for weeding out bad actors must be balanced by the need to provide a predictable and stable program for those with legitimate interests so that the United States can continue reaping the significant benefits of attracting foreign investors, particularly during this time of economic struggle and uncertainty.
America is no longer the overwhelmingly dominant global superpower, and cultural arrogance is not a platform from which to operate a congressionally mandated program. However, the United States is still considered the “land of opportunity” throughout the world and can provide excellent educational and quality of life options for high net worth individuals and their families. Although painful to admit, the US cannot afford to deter the billions in capital and hundreds of thousands of jobs that result from EB-5 investment.
Now is the time for the United States to encourage entrepreneurs, capital inflow and job creation. The EB-5 program is smart business, and the United States should be a world leader in attracting immigrant entrepreneurs who are ready and willing to take on the challenge of making it as investors and job creators in America.