The EB-5 program, as it’s typically known, is officially the EB-5 Immigrant Investor Visa Program or “employment-based fifth preference category.” The program was born in 1990 when Congress designed it to incentivize foreign investment in the U.S. economy, creating new jobs for U.S. workers. In exchange for their qualifying EB-5 investment, foreign nationals would be granted U.S. green cards, allowing them—and their spouse and unmarried children younger than 21—to live and work indefinitely in the United States. Initially, an investor and their family are only granted conditional permanent resident status, but if they can prove their EB5 investment fulfilled the program requirements at the end of their two-year conditional residency period, they can apply to remove the conditions and become fully fledged U.S. permanent residents. Denial of the I-829 petition to remove conditions—or failure to file it—results in the expulsion of the foreign national and their family from the United States.
Who Uses the EB-5 Program?
For the first two decades of its existence, the EB-5 program was severely underused. The program’s existence was not common knowledge, and many foreign nationals unfamiliar with this type of immigration model were skeptical of the program. Until the 2010s, the EB-5 program routinely failed to dole out the 10,000 visas it was allocated every fiscal year. The vast majority went to Chinese EB5 investment participants—China’s massive population and authoritarian government provide both a huge market and a good incentive to make an EB5 investment, and immigration agents across the country promoted the EB-5 program as a high-quality pathway to a life in the United States.
More recently, however, many investors from India, Brazil, South Korea, and Vietnam have been obtaining a larger share of the EB-5 visa pool. The EB-5 program has experienced far more popularity since the 2010s, and foreign nationals from a wide variety of countries are participating.
The EB-5 Regional Center Program
In 1992, Congress introduced a supplementary program to the EB-5 program—the EB-5 Regional Center Program. The regional center program would go on to steal the spotlight, with regional centers accounting for almost all EB5 investments (96% in FY2019). An EB-5 regional center is a commercial entity that partners with EB-5 project developers and attracts EB-5 investors to invest in them, pooling together capital from multiple investors to make larger EB-5 investments. The regional center acts as an important intermediary in the EB-5 investment process, with continued approval from United States Citizenship and Immigration Services (USCIS) dependent on its ability to drive economic growth in a specified region.
However, the regional center program depends on periodic government reauthorization. Congress failed to reauthorize the program before the June 30, 2021 deadline, so this investment model has been defunct for over six months as of January 2022. All EB-5 investments must be direct for the time being, and it is unclear when the regional center model will return.
Opinions on the EB-5 Program
The EB-5 program has brought millions in foreign investment capital to the U.S. economy since its inception, creating hundreds of thousands of new jobs for U.S. workers. It has allowed project developers to access relatively cheap investment capital when traditional funding was not available, such as after the 2008 financial crisis. And it has helped hundreds of thousands of foreign nationals set up a new life in the United States, enjoying a life of freedom and a brighter future for their children. Indeed, many highlight the benefits of the EB-5 program, adding that the various requirements of the program, such as the need to prove the lawful sources of EB5 investment capital, protected the program’s integrity.
Others have been critical. The EB-5 program is often demonized in the media, which focuses on a few isolated cases of fraud instead of the thousands of cases of honest, good-faith developers and investors. Some critics denounce EB-5 as a scheme to buy residency in the United States, and some have voiced concerns about foreign adversaries, such as the Chinese Communist Party (CCP), abusing the program to obtain permanent residency for its members.
To ignore cases of fraud, however rare they may be, or the potential security concerns the program may cause would be irresponsible. Indeed, EB-5 stakeholders readily recognize the flaws in the EB-5 program and push for sensible reform. After all, the EB-5 program has had a myriad of positive impacts—on the U.S. economy, for U.S. jobseekers, and for the individual developers and investors alike—all at no cost to the U.S. taxpayer. The EB-5 community urges Congress and the public to recognize the benefits of the EB-5 program and to work to improve the program, not demolish it.