Recently, a Brookings Institution study has offered a solution to issues related to EB-5 visas. The idea is that the U.S.C.I.S. (U.S. Citizenship and Immigration Services) should work collaboratively with the Department of Commerce in overseeing projects that are funded through the EB-5 visa program.
A growing concern with the current program is that it goes “far beyond the immigration agency's mission and it should better tap the business expertise of other government entities.” Failed projects have only increased cause for concern. Take, for instance, the Northern Beef Packers plant in South Dakota and an approved hotel and conference center in Chicago.
It seems that other agencies within the federal government would be much more appropriate for dealing with potential EB-5 visas. The EB-5 visa program was originally created in 1990. At the time, the program was considered to be a good way to attract foreign investment and create jobs. Each investment must be either $500,000 or $1 million, depending on the expected location of the project. In addition, the project must create a minimum of 10 full-time jobs.
Currently, the program allows for a maximum of 10,000 EB-5 visas to be made available each year to investors and their family members. Although the cap has never been met, the demand has been rising. In 2007, only 800 EB-5 visas were issued compared with the 6,600 issued in 2012.
There is another side to the EB-5 visa program debate. Not only does the program lack in business and financial organization, but there is also the underlying ethical debate as to whether the selling of visas is an appropriate practice. David North, a fellow for Immigration Studies in Washington D.C. says that he would prefer the entire program to be eliminated.
North is realistic, however, in that the program is likely not going away anytime soon. He does admit that partnering with other federal agencies is a good idea. He notes that one main problem with EB-5 visas is that those who are seeking EB-5 approval are those who cannot receive traditional loans with banks or other financial institutions. Therefore, these investments may not be the wisest choice in the first place.
Audrey Singer, a co-author of the Brookings Institution report, counters that point by saying that banks and other financial institutions “have changed their practices so dramatically that [EB-5 visas] have become a viable option.”
Specifically, the Brookings Institution's report has introduced the following proposals:
- Designate an oversight role for the Department of Commerce: this would allow for the supervision of “regional centers, standardize data and methodology, and better monitor program impact.”
- Create incentives for partnership between regional centers and EDA's (economic development agencies): This would allow for an alignment of goals and mutually beneficial arrangements.
- Generate high-quality, multi-variable public data on regional centers: This would allow for a better evaluation of the overall program.
It will be interesting to see if any of these proposals get implemented and how they could potentially impact the EB-5 visa program and immigration as a whole. Do you have any thoughts on the Brookings Institution's report?