By Reforming America’s immigration system is at the forefront of every politician’s mind at the moment. That’s why now is a great time to call on Congress to improve the EB-5 Immigrant Investor Program.
In a speech on Thursday, President Trump outlined a plan for modernizing our immigration system for a stronger America. The plan described two main goals. The second goal is relevant to the EB-5 industry.
According to President Trump, the second goal, “establishes a new legal immigration system that protects American wages, promotes American values, and attracts the best and brightest from all around the world.”
President Trump’s plan seeks to change what he calls a dysfunctional system where the majority of immigrants are selected by random chance. By this he means that they obtain visas simply through having an extended relative living in the U.S., being selected in a random lottery, or for humanitarian relief reasons. Instead of chain migration, the President wants to issue merit-based visas.
“As a result of our broken rules, the annual green card flow is mostly low-wage and low-skilled. Newcomers compete for jobs against the most vulnerable Americans and put pressure on our social safety net and generous welfare programs,” stated President Trump.
Here’s where the EB-5 Immigrant Investor Program shines. Each year, the EB-5 Immigrant Investor Program, also known as the Regional Center Program, issues thousands of visas to foreign nationals who invest $1 million or $500,000 in targeted employment area into new commercial enterprises. A targeted employment area is an area that is either rural or has an unemployment rate that is 150% the national average. These new commercial enterprises then invest the capital into job creating enterprises. Each EB-5 investor must create 10 full time jobs for qualified U.S. workers in order to complete the program and obtain unconditional permanent residency for themselves, their spouses, and their unmarried children under the age of 21 years.
The EB-5 Program is exactly the type of visa program that the Trump administration could champion. While other visa categories invite immigrants to come to the U.S. and compete for jobs against Americans and use our social safety nets, the EB-5 Program selects knowledgeable foreign nationals who stimulate the U.S. economy through capital investment and job creation. The EB-5 Program requires investor’s investments to be sustained in the project and to remain at risk for a substantial period of time. Therefore these foreign investors only succeed and obtain their green cards if American projects succeed in creating or, in some cases, saving jobs.
When the U.S. suffered during the 2008 recession, EB-5 Program provided a critical capital investment to U.S. developers who could not obtain funding through traditional means.
A unique program, the EB-5 Program highly incentivizes immigrant investors to invest in projects located in rural and high unemployment areas that will boost local economies.
The President seeks to “increase the proportion of highly skilled immigration from 12 percent to 57 percent” and to prioritize immediate family members. One of the main reasons foreign nationals invest in EB-5 visas is so that their children can attend university in the U.S. and then stay for highly skilled job opportunities. President Trump’s remarks could spell very good news for EB-5, if Congress passes it.
So far, Congress has indicated that these immigration reforms will not pass. Although successful, the EB-5 Immigrant Investor Program desperately needs reforms to make it the best program it can be. This includes changing the visa cap to only include principal investors. Currently, the 10,000 visa cap includes investors and their dependents, so in essence, only about 3,000 investors are counted. This issue has caused visa backlogs or expected backlogs for countries where EB-5 is extremely popular. These countries include China, Vietnam, India, South Korea, and Brazil. These backlogs mean the wait time for a visa to become available could take over 10 years for some countries. Basically, it’s motivating exceptional applicants to look into immigrating to other countries.
This could change, but it rests on Congress to make it happen.
For more information about the EB-5 Immigrant Investor Program, send us a message.
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