Two U.S. senators, Dianne Feinstein and Chuck Grassley, have introduced legislation to end the much-debated EB-5 investor visa program, whereby high net worth individuals around the world invest a minimum of US$500,000 into businesses that will create at least 10 jobs in exchange for an American green card.
The senators jointly said, “(The EB-5 program) says that U.S. citizenship is for sale. It is wrong to have a special pathway to citizenship for the wealthy while millions wait in line for visas."
Launched in 1990 as a means to stimulate U.S. economy, the program is an opportune path for investors to obtain permanent residency in the U.S. along with their immediate families. Approximately 10,000 visas are issued through the EB-5 program each year, with a large proportion of these being granted to Chinese nationals. Most of the investments made (over 90%) are in approved regional centers which pool investors’ funds and allocate them to invested projects.
However, the senators proposing to shut down the program have indicated that there is no way to assess how many jobs were actually created through the EB-5. In addition, some regional centers have been labeled as located in high unemployment areas while they are actually positioned in wealthy cities. In these cases, applicants to the program should be investing the full US$1 million instead of the discounted US$500,000 for designated targeted employment areas (TEAs).
Sen. Grassley said that efforts to reform the program have been absent and that it was time to “wind down the program and completely mitigate fraud, abuse and threats to our security.” The intention is to re-distribute the 10,000 visas to other immigration programs.
Some industry leaders, however, believe that the probability of the termination bill being passed is slim. Introduction of the bill comes at an uncertain period with regards to immigration in the U.S. Within just a few weeks post-inauguration, executive orders were signed by new President Donald Trump to temporarily block all travel and visas for nationals of seven Muslim-majority countries, as well as to build a wall on the U.S.-Mexico border.
Close to US$17 billion in investments have been made through the EB-5 program since 2008, making this one of the most successful investment immigration program in the world. In addition to foreign capital, each investment creates a minimum of 10 jobs, resulting in thousands of jobs for U.S. workers.
The H-1B, another controversial visa program, allows foreign workers to come to the U.S. for employment, and has been blamed for taking away work from qualified Americans in order to pay lower wages to foreigners. Contrary to that program, the EB-5 keeps jobs for Americans instead of eliminating them.
The Department of Homeland Security (DHS) has recently published a proposed rule change that would increase the minimum investment for the EB-5 program to US$1.35 million for high unemployment areas and to US$1.8 million for other locations. The program is currently set to expire on April 28, 2017.
If you are interested in applying for immigration to the U.S., this may be your last opportunity to do so. If the program does not end completely, investment minimums will unquestionably increase. Contact our office to learn more.
For more information on the U.S. EB-5 program, please click here.
Fill out our Free Assessment to find out if you qualify for any of the immigration programs offered.