As COVID-19 sweeps through the United States and the rest of the world, it has left a path of shuttered businesses and unemployment behind it. As an employment-based immigration program that creates jobs for the everyday U.S. worker, the EB-5 Immigrant Investor Program could be ideal to help the U.S. economy get back up and running. Unfortunately, the U.S. government does not seem to recognize the powerful ways in which the EB-5 program could aid in the economic aftermath of COVID-19.
Immigration has been a hot topic in Washington in the midst of the pandemic. On April 22, President Trump signed an executive order suspending most forms of immigration for 60 days, although EB-5 investors were among the exemptions due to the many jobs they create for U.S. workers. However, much of the immigration activity has not been in the EB-5 program’s favor, from unfounded rumors of major changes to the EB-5 program in coronavirus relief bills to a letter from senators urging Trump to expand the immigration suspension to EB-5 investors and other employment-based immigration.
So far, no concrete actions have been taken against the EB-5 program, but the threat looms in the air. The unpredictable circumstances could bring hardships to the EB-5 program or, conversely, offer benefits to EB-5 investors, since the lack of other visas being issued could work in EB-5 investors’ favor. At the same time, given that Congress created the EB-5 program in 1990 specifically to stimulate the U.S. economy through job creation, it’s a mystery that it isn’t being promoted. The EB-5 program may be exactly what the United States needs in the aftermath of COVID-19.
Lack of Political Support for the EB-5 Program
While the EB-5 program could provide massive benefits to the U.S. economy and U.S. workers as the country prepares to exit the lockdowns and resume normal life, politicians largely aren’t on board. Rather than look at the objective facts of EB-5’s job-creation potential, many politicians prefer to stubbornly stick to their talking points. With Republicans fixated only on the negative aspects of immigration and Democrats edging ever closer to socialist policies and away from business interests, the EB-5 program doesn’t fit within either party’s narrow scope.
The EB-5 program could help struggling businesses survive and regain the jobs they had to terminate, and it could offer thousands of newly unemployed Americans fresh employment opportunities, all while bringing in successful upper-middle-class or upper-class foreign investors ready to spend their disposable income and tax dollars in the United States. It would be good for Republicans, saving businesses, and for Democrats, helping vulnerable people regain their jobs. Unfortunately, neither party seems to see these benefits.
The EB-5 Program’s Undeserved Poor Reputation
The EB-5 program generally does not have a positive public image, largely thanks to negative press coverage. A successful EB-5 investment would not be newsworthy, but a fraudulent scandal makes headlines across the nation, which ensures the general public associates EB-5 with fraud, even though EB-5 fraud is extremely rare. Then, government officials, who ought to know better, are forced to fall in line with the mob to maintain popularity.
The EB-5 industry must fight bad press with good press. If the U.S. public realized what the program actually does—that each investor’s approval is contingent on the creation of at least 10 new full-time jobs for U.S. workers—they would be far more likely to support it. If people knew that each investment had to be at least $1.8 million—or $900,000, if the project is in a targeted employment area (TEA)—they would be far more likely to rally behind it. The EB-5 program’s economic potential is obscured by the industry’s poor public relations.
The IPO’s Failings
Amidst all the difficulties the EB-5 program is currently facing, the Immigrant Investor Processing Office (IPO), which oversees the EB-5 program, is not helping EB-5’s cause, either. To work properly and provide the economic stimulation it was intended to, the program needs to be run efficiently, with I-924 petitions processed quickly to establish new regional centers and foster promising EB-5 projects and I-526 petitions traveling through the pipeline quickly to ensure EB-5 investors trust the program and don’t become discouraged and withdraw.
At present, this is mere fantasy. The IPO seems to be doing the exact opposite, taking four to six years to adjudicate I-924 petitions and as long as three years for I-526 petitions. Its recent string of EB-5 regional center terminations also hurt the program’s ability to help jumpstart the U.S. economy after COVID-19. The IPO has been shutting down regional centers that fail to maintain a robust investment pipeline and frequent activity, which naturally disproportionately affects regional centers in rural and high-unemployment areas. In this way, the IPO is actively disincentivizing investors from pouring capital into the areas that need EB-5 the most.
EB-5 Needs an Image Change
The EB-5 program is poised to significantly aid the United States in its economic recovery following the pandemic, but the media, Congress, and even the IPO are hampering its potential. With all the troubles the EB-5 program is facing, some potential investors are instead opting for immigrant investor visas from Canada, Australia, and other countries instead of investing their valuable capital into the United States. Congress and the IPO need to make some changes to the EB-5 program to increase its viability.
The path to a better EB-5 may be through alterations to its public image. EB-5 users can help the cause by signing IIUSA’s open letter to Congress.