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Why The EB-5 Program is Essential to the U.S. Economy

On Behalf of | Feb 22, 2017 | EB-5

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The immigrant investor program, also known as the EB-5 program, was part of an overhaul of the U.S. immigration system. The purpose of the program is to stimulate the U.S. economy and to create jobs by giving foreign investors the opportunity to permanently live and work in the United States after they have invested in a job-creating U.S. business.

In short, if a foreign entrepreneur invests money in a U.S. business and, because of that investment, at least 10 full-time U.S. jobs are created, the foreign investor, his spouse and his children (under the age of 21) will receive U.S. green cards.

Since its inception, the EB-5 program has undergone a great deal of reform and has evolved tremendously. Once an obscure federal immigration program, the EB-5 investor visa program has become an essential tool for creating jobs and boosting the U.S. economy on both national and local levels.

The two most obvious reasons why the EB-5 program is essential to the U.S. economy are its capacity to generate foreign investment and its ability to create jobs. However, during the recent economic crisis, a few other reasons also became clear.

The EB-5 Program Makes Capital Available During Economic Downturns
With the help of EB-5 Regional Centers, the EB-5 program showed itself to be a reliable method of financing even in the midst of a recession and banking crisis. A Regional Center is a business organization that is designated and regulated by the U.S. Citizenship and Immigration Service to administer EB-5 investment funds.

The role that Regional Centers play in the EB-5 process is critical to the program’s performance and has accounted for the majority of visas granted since its establishment. Regional Centers pool funds raised through the EB-5 program and lend them to qualifying projects.

For U.S. business owners and developers, the global funds made accessible through EB-5 Regional Centers helps to broaden the availability of capital when resources are scarce. In fact, during the latest economic crisis, the number of EB-5 Regional Centers increased dramatically, as did the number of EB-5 visas granted and EB-5 projects that were started.

This is because, unlike financial institutions, private foreign investors are likely to invest money for a modest rate of return in exchange for obtaining their ultimate objective of a Green Card. Consequently, EB-5 funding can withstand even the toughest economic conditions.
The EB-5 Program Addresses Common Urban Challenges
Urban areas across the United States constantly face difficulties such as rising unemployment, shortages of quality housing, and a lack of affordable housing. Thus, cities have to consistently come up with ways to create jobs, improve economic growth and increase housing development.

Regional Centers look for investment opportunities that will create jobs in areas with high unemployment and market those EB-5 investment opportunities to foreign investors. In this way, Regional Centers helped to revitalize the nation’s urban economy during the recent recession.

But, the benefits of these EB-5 investments to U.S. communities were not limited to their ability to create jobs. EB-5 investments also boosted the urban commercial real estate market and dealt with the lack of affordable housing by facilitating the launch of large housing developments, urban improvement projects, and senior living facilities that speak to the particular needs of the nation’s elderly.

The EB-5 Program Costs U.S. Taxpayers Nothing
Not unlike other nations, the United States needs laws and regulations that will create jobs and boost investment in order to maintain economic growth through both short-term and long-term challenges––at zero cost to the taxpayer.

While the 2009 American Recovery and Reinvestment Act, also known as the “stimulus” bill, generated one job for every $100,000 to $400,000 in public spending, the EB-5 program has created tens of thousands of jobs without the use of public funds.

Since 2008, more than $13 billion in foreign direct investment entered the U.S. economy through the EB-5 program. In addition, the EB-5 program added $9.62 billion to GDP and $2 billion to local, state and federal taxes, all while creating an average of over 29,300 jobs per year—at no cost to U.S. taxpayers.

A decade earlier, few people could have foreseen how successful the EB-5 program would become. At that time, the lending environment was a lot friendlier and there was not as much need for alternative financing.

However, U.S. economic conditions have changed a great deal, and the EB-5 Program has proven itself to be a reliable source of alternative financing that can attract private investment to create U.S. jobs and economic growth at no cost to U.S. taxpayers. Above all, it is an excellent opportunity for foreign entrepreneurs to live and work in the United States.

Thinking About Investment Immigration?
If you are interested in becoming an EB-5 investor, our immigration lawyers can assist you in preparing the required documents and fulfilling the necessary requirements. David Hirson & Partners, LLP has over 30 years of experience representing foreign investors looking to obtain a U.S. investment visa. We also advise on other business, investment, and family-based immigration options that can fit a client’s specific needs. Contact us today at .
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