The So-Called “Golden Visa”: The Role of the E-B 5 Visa in the US and Its Proposed Reform
The Eligibility Requirements for the EB-5 Immigrant Investor Visa
The EB-5 Immigrant Investor Visa is a powerful tool, used by the U.S Government to facilitate the regeneration of low income areas of the U.S and boost economic growth.
The visa allows foreign nationals to obtain permanent resident status in the U.S, on the basis of investment in the U.S economy.
In order to qualify, an applicant is generally required to invest at least $1 million in the U.S. If the investment is made in an area that has been designated a Targeted Employment Area by the U.S Government, a minimum investment of $500,000 is required. Targeted Employment Areas are generally low-income areas or rural areas, where investment is needed to boost the economy. Only 10,000 EB-5 Immigrant Investor Visas are available globally every year.
The History of the EB-5 Immigrant Investor Visa
The EB-5 Visa, introduced by the Immigration Act of 1990, initially attracted little interest among prospective U.S investors. Indeed, in 2003 only 65 EB-5 Visas were issued to foreign investors.
However, the global economic crisis of 2008 led to a sharp rise in popularity of the EB-5 Visa. According to statistics released by the U.S Commerce Department, between fiscal years 2012 and 2013, more than $5.8 billion was invested in the U.S as a direct result of the EB-5 Visa program. The funds supported 562 projects in the U.S, including the building and maintenance of highways, hotels and casinos. The investments are estimated to have created in excess of 174,000 jobs for U.S workers.
U.S. Citizenship and Immigration Services (USCIS) estimate that, on average, over three-quarters of EB-5 Visa applicants are of Chinese nationality. The quality of the U.S education system, the relative lack of pollution in the U.S and the financial advantages of transferring Chinese-owned assets overseas are cited as the main reasons for the success of the program among prospective Chinese investors.
Criticism of the EB-5 Immigrant Investor Visa Program
In recent years, the program has come under fire from both sides of the political spectrum. Critics have contended that the EB-5 Visa program effectively allows foreign nationals to purchase permanent resident status in the U.S by simply writing out a check. Similarly, the program has been plagued by allegations it is a vehicle for investment fraud, money laundering and terrorist travel.
In recent months, a number of high-profile investigations into EB-5 investment fraud have been reported in the U.S media. Earlier this year, it was reported that Federal Agents in California were investigating an alleged fraudulent investment project, which promised to refund the investments once the visa had been granted. Equally, there have been multiple cases of EB-5 investors making investments in good faith, only for their funds to be misappropriated by rogue individuals for personal enrichment. In 2016, a review by the Fraud Detection Office at USCIS of a random sample of pending visa applications led to the discovery of numerous fraudulent documents. Such publicity has done little to quell the growing discontent for the EB-5 Visa.
Possible Reform of the EB-5 Immigrant Investor Visa
At the time of writing, reform of the EB-5 Immigrant Investor Visa program appears to be both imminent and inevitable.
On January 13, 2017 the Department of Homeland Security (DHS) published a proposed rule, which would increase the general minimum investment sum required for an EB-5 Visa from $1 million to $1.8 million. For Targeted Employment Areas, the DHS proposed increasing the minimum investment required from $500,000 to $1.35 million. The public consultation on the proposed new rule ended on April 11, 2017. It is anticipated that the DHS will make an announcement regarding the proposed new rule over the forthcoming months