While millions apply and wait years for permanent residency, the EB-5 program allows for investors and their family to become eligible for green cards in as little as a few months. The catch? Foreign investors must invest at least $500,000 in US development projects. As a result in the surge in Chinese investor applications, the US has maxed out the EB-5 visas for the first time in 24 years.
The EB-5 Immigrant Investor Visa program was first created in 1990, developed by Congress for the purpose of stimulating the economy through job creation and capital investment from foreign investors. Investors are required to have a minimum investment of $500,000 in a high unemployment or rural area, (or minimum $1 million without the unemployment or rural restrictions), and required to create or preserve at least 10 jobs for US workers within two years.
For the first 20 or so years of the new visa, the program had little success. The number of investor visa applications approved rarely went above 1,000. However, this year was the first time the US reached the maximum of 10,000 EB-5 visas. Since about 2009, the number of investor visa applications has skyrocketed, fed mostly by wealthy Chinese.
An estimated 85% of EB-5 investment funds are coming from China. Under the program, visas are also granted to a spouse and children. Many Chinese nationals are seeking out permanent residency in the US for their families for environmental and educational reasons. One change offered seeks to eliminate family members from the 10,000 cap, which could increase the total number of visas to about 30,000.
The program has been touted as a success by both Democrats and Republicans, for creating jobs. The government has estimated the program has created at least 49,000 jobs, and brought in more than $6.8 billion in investments. However, some criticize the actual effect the program has had, arguing that the job numbers reflect some non-EB-5 investments, and that the projects would be funded anyway from other sources. Others allege the program is merely a visa-for-sale visa-for-sale scheme that benefits only the rich.
There are risks associated with the visa program above and beyond those associated with traditional investments. An article in Fortune magazine recounts a fraudulent scheme for a convention center in Chicago which bilked hundreds of Chinese investors out of more than $10 million in administrative fees, for a project that went nowhere, and with no visas in return.
As a result of the increased interest in the program, the State Department has stated that procedural changes will result in greater delays in approval of EB-5 visas. In response, changes have been proposed by Republican House Members Goodlatte and Issa, to both streamline the process and increase the number of EB-5 visas. Visas for fiscal year 2015 will be available starting October 1, 2014. EB-5 visa applicants will be waiting in line for that date, and with approval, may be given quick access to a green card that millions of others will continue to await.