by Laura Foote Reiff
The EB-5 program presents foreign national investor-entrepreneurs and their qualifying dependents with an attractive opportunity to live and work permanently in the United States through investment and participation in a new U.S. commercial enterprise, an existing “troubled” U.S. business, or a specially designated public or private economic unit called a “regional center.”
Congress created the Immigrant Investor Program in 1990 to stimulate the U.S. economy and create, or save, jobs by allowing foreign investors to obtain permanent residence in the United States in exchange for capital investment. The Immigrant Investor Program, also known as the EB-5 program, sets aside 10,000 green cards per year for participating foreign nationals. To qualify for an EB-5 visa, a foreign national must invest at least $1 million in the United States (or at least $500,000 if he or she invests in a rural or high unemployment area) and demonstrate that the investment created or saved at least 10 jobs for U.S. workers. The EB-5 program is overseen by the U.S. Citizenship and Immigration Services.
In 1993, Congress expanded the EB-5 program by creating the Immigrant Investor Pilot Program, or Regional Center Program, which permits foreign investors to pool their investments with other investors through designated regional centers. The program has continually been reauthorized since its inception, and in 2012, there was a serious bipartisan effort to make the program permanent as it approached its Sept. 30, 2012 sunset. As the deadline drew closer, Congress passed and President Obama signed into law S. 3245, extending the EB-5 Regional Center Pilot Program for an additional three year period (until Sept. 30, 2015).
For many interested EB-5 Regional Center participants and those already vested in regional center projects, all eyes are again turned to Congress to see if the Sept. 30, 2015 expiration date of the pilot program will be met with a resolution to permanently reauthorize the program.
The efforts of crafting a Comprehensive Immigration Reform (CIR) bill — to overhaul the broken U.S. immigration system — were reborn in January of 2013. This effort will undoubtedly include ways to improve and expand the EB-5 Program. President Obama included EB-5 reform in his outline for immigration reform by calling for permanent authorization and an expansion of the Regional Center Program. The Gang of Eight Senators working on immigration reform has also made it clear that reform of the existing legal immigration system is a top priority to be included in their comprehensive immigration reform package.
The push for CIR offers opportunities to change and improve the substance and administration of the EB-5 Program, as well as the Regional Center Program. Some of the proposed changes being contemplated include:
- Immigrant visa quotas: Eliminating the per country quotas for all immigrant visas. This would especially alleviate the potential for a backlog in the Chinese visa category, as it is expected to oversubscribe sometime in the spring of 2013.
- Immigrant visa numbers: Provide additional visa numbers for the EB-5 category and/or allow exemptions from the immigrant visa numbers in certain circumstances.
- Make the Regional Center Program permanent.
- Overhaul the program administration: This would include a review of agency oversight and an attempt to make the program more user- and business-friendly.
- Change the definition of Regional Center: This would allow program participants to satisfy the program requirements by showing the benefits to the U.S. economy as a whole, rather than a local economy.
- Revise the definition of Targeted Employment and Rural Areas to lower the investment amount to $500,000 from $1,000,000.
It is time for Congress to not only overhaul our dysfunctional immigration system, but it is also time for the country to recognize the valuable contributions of immigrant investors. Changes to the EB-5 Regional Center Program would further assist our country in the economic recovery that is long overdue. Entrepreneurial investors making investments that create jobs and infuse capital into new businesses is a win-win for all involved.