COVID-19 has made its way to nearly every country in the world, with confirmed cases building quickly in New York, California, and other states across the United States. Schools are closing and businesses are shutting down—some permanently—resulting in major layoffs. Politico has falsely reported that to stimulate the economy in these chaotic times, President Trump is considering raising the number of available EB-5 visas to 75,000 and reducing the required investment amount to $450,000.
The EB-5 Immigrant Investor Program was born in 1990 as a way to entice foreign nationals to invest in the U.S. economy and job market in exchange for permanent residence—the right to live and work permanently in the United States.
Roughly 10,000 visas are available each fiscal year for EB-5 investors and their spouses and unmarried children below the age of 21. Some EB-5 projects are classified as being located within a targeted unemployment area (TEA), which is defined as an urban area with high unemployment or a rural area. Until 2019, EB-5 investors were required to invest $500,000 in a TEA project or $1 million in a non-TEA project. When the EB-5 Modernization Rule came into effect in November 2019, the amounts were increased to $900,000 and $1.8 million, respectively.
Politico reported that, in a movement headed by Senator Lindsey Graham (R-SC), a new reduction to an unprecedented low may be introduced to combat the economic turmoil caused by COVID-19. Graham has spoken out about the matter, declaring that the report is false and that he is not using the coronavirus recovery bills to promote the EB-5 program.
The EB-5 program has previously helped stimulate the U.S. economy after periods of chaos, such as after the 2008 recession. Project developers turned to the EB-5 program when loans from banks became difficult to obtain, and the program grew to new heights—since 2008, EB-5 investors have contributed an estimated $37.2 billion to fostering the U.S. economy. Between FY2010 and FY2015, the EB-5 program drove down unemployment by creating around 276,000 new full-time jobs and boosted national infrastructure by generating approximately $5 billion in tax revenues.
Most EB-5 investors invest in TEA projects, which are located in areas in greater need of economic stimulation. To be eligible for the EB-5 visa, investors need to prove that their capital has funded the creation of at least 10 new full-time jobs for U.S. citizens and residents, and their capital must remain at risk until they receive their unconditional permanent resident status after at least two years. Though changes to the EB-5 program in light of COVID-19 are not being considered at present, the program remains a powerful way to create new jobs, which may be desperately needed after the resolution of the coronavirus pandemic.