Politico has an exclusive story indicating that the Trump Administration is currently weighing an EB-5 overhaul proposal that could be included in one of the Senate’s coronavirus rescue bills. The proposal would increase EB-5 visas to 75,000 annually (up from ~10,000) and bring the minimum investment amount to $450,000, undoing the significant damage done last Fall by the EB-5 Modernization Rule.
Over the past three years, you’d be hard-pressed to find an immigration attorney endorsing practically any of the Trump Administration’s immigration proposals or policy changes. The damage done will take years to restore by future administrations. But fixing EB-5, especially now, would be good policy.
In my opinion, Politico’s article is heavily biased as it quotes two anti-immigrant groups and fails to consider the viewpoint of a single immigration attorney, backlogged investor, or Regional Center. Contrary to the tone of the article, fixing the EB-5 visa’s woes could be extremely helpful as the nation braces itself for an unprecedented economic downturn. As we saw roughly 12 years ago with the Great Recession, borrowers seeking capital from traditional sources can leverage EB-5 investor funds to complete projects otherwise unattainable through conventional loans. As explained by USCIS, the centerpiece of the EB-5 program is job creation – each investor must create 10 jobs to obtain Green Cards for themselves and their family. Restoring jobs lost due to businesses closed in efforts to “flatten the curve” of the coronavirus spread is something that immigrant investors could fuel.
At present, the EB-5 program is not as attractive to projects and investors as it once was. Beginning in 2014-15, a shortage of available visas for Chinese-born investors – who have historically dominated the program – has become a major issue in recruiting investors to finish investment offerings. Those shortages have also dropped demand in Vietnam and to a lesser extent, India. Most families do not want to bear an unpredictable wait to be able to immigrate to the U.S. Administrative reforms compounded these problems with demand. In November, the program’s minimum investment amount increased from $500,000 to $900,000, and most existing projects cannot qualify for this minimum due to methodology changes in Targeted Employment Area determinations. It’s little wonder that relatively few investors are filing new cases these days.
By dropping the minimum amounts and ensuring there are enough EB-5 visas to meet demand, Congress can finally restore the program’s potential that has been stymied by legislative inaction and administrative missteps. Demand, particularly from China, would drive the program to unprecedented success.
Indeed, the coronavirus presents global challenges perhaps unseen since the Second World War. Beyond the paramount public health issues, economic issues will loom large into the future. Utilizing immigrant investor funds to spur economic recovery or to brace against the downturn are smart plays for countries to make, and other governments are mulling similar ideas. Congress should use every tool in their toolbox to protect the American economy in the months and years to come.
For more information about the EB-5 visa and whether it is suitable for your family or your business, contact us today.