Friday, October 26, 2012

EB-5 Program is a Win-Win, Creating Jobs and Making American Dreams Come True

As the United States struggles to reinvigorate its economy and create jobs, a decades old program is experiencing record popularity in the U.S., and just may hold the keys to some much needed economic stimulus.

The EB-5 visa program, also known as the Immigrant Investor Program, was created in 1990 by Congress in an effort to stimulate the American economy, promote job growth and encourage capital investment by wealthy foreign investors.  The program provides U.S. green cards to foreign investors and their families, enabling them to become permanent residents in the United States, in exchange for a sizeable investment in a U.S. venture.  The investor must contribute either $1 Million in any location throughout the U.S., or $500,000 to a project located in a rural or high unemployment area.  Furthermore, the investment must create or preserve a minimum of ten full-time, permanent jobs for qualified American workers within two years after the investor’s admission into the United States.

The EB-5 program, named that because it is the fifth category of employment based visas issued by United States Citizenship and Immigration Services, is estimated to have created about 34,000 jobs over the life of the program.  However, that number looks to be rising rapidly, as the program is now more popular than ever.  The number of applicants for the EB-5 Visa has risen from 1,000 in 2009, to 2,000 in 2010, to over 3,000 in 2011.  And with each of the successful applications bringing with it at least 10 new jobs, the potential for a significant economic impact becomes apparent.  In Oregon alone, where the program is experiencing heightened popularity, projections are that as many as 1,000 jobs will be created in the next two years.

The surge in popularity may be attributable to several factors, including, not surprisingly, the economic downturn of late in the United States.  Not only has the downturn created an even greater need to create permanent, full-time jobs, but it has also resulted in a reduction in domestic lending through the traditional bank loan route.  As a result, some developers see the EB-5 program as an alternative way to raise their needed capital.  By soliciting a group of EB-5 investors and pooling their investments together at a regional center, they can generate the large sums of capital that they need to make their projects a reality.
At the same time as the demand for EB-5 investor capital has risen in the U.S., in China, where the majority of EB-5 investors originate, the country’s economic prosperity has resulted in a greater number of interested investors who can afford the hefty price tag of the EB-5 visa.  With supply rising to meet increased demand, the program provides a win-win scenario for everyone.   Even the public at large benefits from responsible and innovative initiatives, such as Miami, Florida’s EB-5 funded Florida Organic Aquaculture, a natural and sustainable shrimp farm which recycles shrimp by-products to feed oysters and fertilize sea asparagus.  The farm can operate 365 days a year and yields ten times the output of a traditional farm, passing cost savings and environmental benefits along to the public.

The EB-5 program has also grown in recent years due to increased interest from Latin American investors.  Unfortunately, the popularity among wealthy Latin Americans stems largely from the fact that they do not feel safe in their home countries, facing the constant threat of kidnappings and extortion. This goes to show that even during these dark economic times, the United States is still a premier destination for immigrants seeking a better life.

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