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U.S. EB-5 Program

EB-5 Should Receive Trump’s Backing


Published   06:09 AM 4 January 2017
Updated    06:13 AM 4 January 2017

EB-5 Should Receive Trump’s Backing
Although Donald Trump has remained adamant throughout his campaign about deporting an estimated 14 million illegal immigrants from the United States, one immigration program that should withstand Trump’s anti-immigration reform is the EB-5 Investor Visa Program.  

The EB-5 Program was created in 1990, and became an important tool for financing projects during the financial crisis of 2008-2009. During that period, businesses, especially real estate developers, had a very difficult time obtaining any commercial loans. Property developers knew that low interest rates and increasing international wealth could aid projects with long-term capital requirements, so they turned to foreign investors. It is those foreign high net worth individuals that have helped fund much of Miami’s and New York’s skylines.

The EB-5 Program offers foreign nationals the opportunity to receive U.S. permanent residency (Green Card) in return for an investment of US$500,000-US$1,000,000 into a business that will in turn create 10 new jobs for qualifying Americans. The foreign investors obtain permanent residency for themselves as well as for their immediate families, including spouse and children.

Unlike the U.S. H1-B visa which hires foreign workers and is said to “steal” jobs from Americans, the EB-5 Program creates jobs for U.S. workers. Certain companies continue to keep their wages low by hiring international workers through H1-B instead of residents. Trump is supportive of job creation which is one of the main goals of the EB-5 Program.

There are currently over 800 United States Citizenship and Immigration Services (USCIS) approved Regional Centers across the U.S. that sponsor capital investment projects for investment by EB-5 investors. The Regional Centers act as a hub for development projects in need of foreign capital. Immigrant investors looking to escape economic and political turmoil in their home countries and wanting to build new lives for their families in the U.S. often choose to invest in Regional Centers due to the reduced investment amount as well as the passivity of the investment. Regional Center investors are not required to actively manage the business, and the requirement of 10 new jobs can be fulfilled through indirect jobs created collaterally through the investment.

Although a few fraudulent Regional Centers made the headlines recently, less than 4% of those approved by USCIS have been shut down due to fraud according to data provided by Homeland Security. The EB-5 Program has been used to commit fraud just as any banking or investment system has been used to commit fraud. There seems to be a stronger adverse reaction to the EB-5 though as it is based on immigration. Those in favor of Trump and anti-immigrant policies are opposed to EB-5 as it brings more foreigners to the U.S. Democrats may be opposed to EB-5 since it is biased towards the world’s wealthy, and against immigrant workers whose visas have expired. In the end, the total number of immigrants who are stuck in status limbo due to fraudulent EB-5 cases is less than 5% of the total estimated fraudulent immigration cases.

Due diligence is conducted on all cases to investigate the foreign investor as well as where their investment funds originate. An unlawful or undocumented source of funds is not accepted for investment purposes and results in the majority of EB-5 refusals. The program is in need of some reform including bettering the transparency of Regional Centers to help reduce fraud, however, the EB-5 Program remains a great method of financing projects in the U.S. through foreign funds, and at the same time creating jobs with that capital.
Nobody really knows the severity of Trump’s immigration policies once he’s sworn in as President of the United States. If, however, he is as supportive of job creation and attracting foreign investment as he claims, then the EB-5 should continue to receive unwavering support.

For more information on the U.S. EB-5 Investor Visa Program, please click here.

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