The EB-5 “Immigrant Investor” program was originally conceived as a way of attracting funds for real estate development projects in needy areas in return for visas permitting immigration to the USA. As first enacted in 1990, it allowed a foreign investor who put $1 million into a project that created at least ten jobs to be granted a visa, with up to two more visas granted to family members. The maximum number of visas that could be given under this program in any year was 10,000. The program was modified to require only $500,000 for investment in rural areas or areas of high unemployment.
Half a million dollars is not a lot of money in relation to projects that can make a real difference to employment in deprived areas. The program was therefore modified once more, this time permitting investors to be joined together in “regional centers”. The intention was that these centers would identify the targeted employment areas most in need of new job creation. Developers would apply to be part of a center and investors’ money would be “pooled” in order to reach the level needed to get the proposed development off the ground. It is this aspect that has caused lawmakers and others to question whether the expiring EB-5 program should be renewed in its present form – or, indeed, at all.
Until recently, there was not enough EB-5 activity to warrant investigation. In 2007, for example, only seven hundred EB-5 visas were issued. However, as other routes to immigration have become more difficult or even closed, interest in EB-5 has risen and 2013 was the first year in which the full quota of ten thousand visas was issued. This has brought a closer look at how the system works, and those doing the looking don’t like some of what they see.