The History of the U.S. Investment Visa
The US Congress’ Immigration Act of 1990 (IMMACT 90) established the EB-5 Immigrant Investor Program to stimulate the U.S. economy through foreign investment and create jobs.
This act dramatically reformed the U.S. immigration system and amongst other things, instituted changes to non-immigrant visa classes, the rules governing deportation, and raised the limits on legal immigration.
EB-5 Reforms of the 1990s
The Immigrant Investor Program was founded as a pilot program in 1990 and is administered by the United States Citizenship and Immigration Service (USCIS). The program permits foreign investors to invest funds in the United States in order to be granted greens cards for themselves and their families to live and work in the US. At least 10 full time and paid jobs must be created for each investor.
Subsequently, in 1993, the Immigrant Investor Pilot Program, which created the EB-5 Regional Center was passed into law. This program allows US business entities to create investment opportunities into which foreign investors may invest to create job in the United States.
As it is with any newborn venture, the EB-5 program’s first decade was shaky and at times unstable. In the late 1990’s, however, Congress made a number of significant changes to the EB-5 program to address a lack of due diligence, regulatory compliance, and inherent fraud in EB-5 investments.
These reforms made it necessary for foreign investors to prove that their EB-5 investment funds originate from lawful sources and that they are actively involved with their EB-5 project. Furthermore, they prohibited guarantees on investment returns.
EB-5 Reforms of the 2000s
Congress interceded again in the early 2000’s in order to institute reforms that would ensure the seamless coordination between the government, adjudicators, commercial ventures, and foreign investors. During this time, the Basic Pilot Program Extension and Expansion Act was passed in 2003 with the aim of reinvigorating the EB-5 program.
There are 10,000 visas allocated to the EB-5 program each year, but in its early years, the program was greatly underutilized. This under-utilization during the program’s early years can be attributed to low case approval rates and a lengthy and complicated application processes, which was streamlined by reforms in 2005.
Another of these reforms was the establishment of the Investor and Regional Center Unit (IRCU) in 2005. This specialized division of USCIS supervises the EB-5 program, which includes auditing of cases, designing reforms, regulating development, and creating policy. All of which have resulted in better management and more consistency in the EB-5 program.
In 2009, USCIS made additional reforms to EB-5 policy and began to centralize EB-5 processing at the California Service Center (CSC). Prior to this, processing had taken place at centers in both California and Texas. Also in 2009, President Obama extended the EB-5 Immigrant Investor Pilot Program until September 30, 2012.
Then on September 30, 2012, President Obama signed S.3245, extending the EB-5 Immigrant Investor Pilot Program for an additional 3 years until September 30, 2015.
Recent EB-5 Trends
In the last few years, the EB 5 Investor visa program has gained popularity and received recognition as an excellent opportunity for foreign investors looking to live and work in the United States.
In fact, only 3,463 visas were issued under the program in 2011. However, by 2012, that number had almost doubled, as 6,200 immigrants received green cards through the EB-5 program.
In 2013, 8,567 visas were granted, and in 2014, it reached its annual limit for the first time.
In May of 2015, the State Department announced that the EB-5 program had reached its first backlog, when its quota for Chinese Nationals had been met. The backlog for Chinese nationals is presently about 3 years for a Conditional Green Card through the EB-5 program.
The Future Of the EB-5 Program
The EB-5 program has been consistently reauthorized, despite the fact that it is not yet a permanent program. Most recently, in early December of 2016, Congress extended the EB-5 Regional Center Program, unchanged, until April 28, 2017.
The program has been extended without changes several times now, largely because Congress could not come to an agreement on the new legislation. That being said, experts are fairly confident that substantial changes to the program’s requirements and restrictions will occur in 2017.
But, while many await these eminent changes, no one knows exactly how they will impact the EB-5 program and future EB-5 investors and projects. Nevertheless, one of the changes that experts are fairly confident in predicting is an increase in the minimum investment amount from $500,000 to $800,000.
Therefore, if you are a potential EB-5 investor looking to invest the minimum amount of $500,000, you are encouraged to get the process started as soon as you can. Though the program has been extended until April 2017, changes could be implemented earlier if Congress comes to an agreement before that date.