The Immigration Act of 1990 (“IMMACT 90”) created the Immigrant Investor Program as the fifth preference category for employment-based immigration, also known as EB-5. This was the first time a category specifically facilitated the admission of immigrant investors as lawful permanent residents and currently remains the only such category to do so. The EB-5 Immigrant Investor Program is available to those immigrants who have invested or are in the process of investing, at least $1 million in a new commercial enterprise employing at least 10 full-time U.S. workers. Individuals who invest in a “targeted employment area” (TEA), however, are only required to invest a minimum of $500,000.In addition, immigrant investors can invest $500,000 in a qualified and approved Regional Center. Indirect investments & investments through a Regional Center, the investor must show that they created at least 10 direct or indirect jobs within two years of an approved I-526 application.
The purpose of the EB-5 program is to stimulate the U.S. economy through job creation and capital investment by offering immigrant investors the benefits of permanent residency in the United States.
Approximately 10,000 visa numbers are allocated annually to EB-5 investors. USCIS reserves 3,000 EB-5 visas for aliens who invest in TEAs and 3,000 for aliens who invest in commercial enterprises affiliated with Regional Centers, as described below. However, participation in the investor program has traditionally been far below capacity. In the first few years after the establishment of the program, USCIS only approved 300-400 I-526applications. When the EB-5 visa was originally created, it did not include the Immigrant Investor Regional Center Program, a USCIS five-year immigrant investor pilot program created in 1993 in an effort to encourage more investors to apply for EB-5 permanent residency.
The purpose of the Immigrant Investor Pilot Program is to attract more foreign investors to fund businesses and projects in specific “regional centers” that would otherwise find it difficult to attract domestic investment based on current geographical market trends. By bringing such investment into areas of economic hardship and high unemployment, Congress hopes to stimulate job expansion, improve regional productivity, invest in infrastructure, and promote the growth of innovative new businesses. Congress has made the Immigrant Investor Pilot program particularly attractive to foreign investors by lowering the investment minimum to $500,000 (for a business in a designated regional center or TEA) as opposed to $1,000,000, and by allowing a less restrictive job creation requirement based upon the creation of “indirect” and “direct” jobs and not requiring the day to day management of the business. The Immigrant Investor Pilot Program has been extended several times and was recently extended through September 30, 2015.
With substantial improvements to the EB-5 category and increased demand; each successive year, the number of EB-5 applicants has grown in popularity. For instance, in 2008, USCIS issued a total of 1,360 EB-5 visas. By 2012, this number amounted jumped to over 4,000 EB-5 visa applications; 80% of these came directly from China. Part of this increase was due to the unprecedented economic growth of China and the creation of many independently wealthy individuals. Additionally, international investors have had their options reduced as Canada recently ended its lenient& inexpensive immigrant investor program. In 2013, 8567 visas were issued through the EB-5 category, and a retrogression of the EB-5 visas is anticipated for 2014 (meaning that visas under the EB-5 category will not be immediately available).
Approval for the EB-5 I-526 applications is high. In 2009, USCIS received 1,028 submissions of Form I-526. Of these, 966 were approved and 163 were denied. Likewise, in 2013, USCIS received 6,517 Form I-526. Of these, 82.6% were approved. Most denials occurred because investors failed to demonstrate their investment funds were lawfully acquired. Please see the EB-5 Immigrant Investor Program Memo issued by the U.S. Department of Homeland Security on June 16, 2010, for more details.
The EB-5 visa essentially offers a good immigration solution for those who have the financial resources to qualify and a tolerance for high-risk investments. It does not require an employment offer from a U.S. employer as other employment-based immigration categories do, nor does it require a labor certificate. With the current economic downturn, USCIS has relaxed its requirements for the EB-5 program as a means to bring in more foreign investment. Most importantly, because the annual quota in the past consistently exceeds the number of applicants, those who qualify for EB-5 status do not typically have to wait long for a visa as there is currently no visa quota backlog for the EB-5 investor category. This is likely to change in 2015, due to increased demand.