Immigration issues have been in the news a lot lately. Practically everyone has at least heard about Arizona’s controversial immigration policies, and some of you may have read our blog on the “Secure Communities” Program. Even more recently, immigration issues have been implicated in California policies with regards to tuition breaks for undocumented aliens.
Well, here’s another one for you. Did you know that an immigrant can basically purchase their citizenship? Few people know about the EB-5 “Immigrant Investor” visa category. Created in 1990, the EB-5 program sets aside 10,000 visas a year for foreign investors who agree to invest a measly $1 million in creating new businesses in America.
Immigrant investors would obtain a conditional green card and, after two years, would have the conditions removed and begin the process of applying for permanent citizenship. All they’d have to do is prove that their business is still operational and had created new job positions for at least 10 workers (excluding jobs for family members). Sounds simple enough? That’s because it is.
Wait, it gets even easier. 3,000 of the 10,000 visas allowed in this category are set aside for “targeted employment areas”. These are areas with high unemployment rates or unique hardships. Foreign investors who elect to set up their business in such areas will have the investment minimum threshold lowered to $500,000.
Investors in this sub-category typically channel their projects through “Regional Centers”, which are state organizations dedicated to overseeing these targeted employment areas. (A full list of approved Regional Centers can be viewed here; click here for application info).
Now, $5K to $1M might sound like a lot, but it is well known that millionaires abound in countries like Singapore, Hong Kong, and Switzerland. And many of them are already investing in U.S. projects as we speak. For an oil tycoon or a mega-industry manager, $5K or $1M is chump change. So why aren’t more overseas Richie Riches taking advantage of the opportunity?
Another critique of this program is that it doesn’t really reflect the traditional American spirit- you know, the image of America receiving the world’s huddled, down-trodden masses. Many people, filled with nationalistic pride, still hold the view that America is the land of opportunity paved with golden streets, and in many ways, it still is.
But if you haven’t noticed recently, the U.S. itself has generated its own tired and poor masses, many of whom are unemployed professionals like doctors and lawyers. It’s about time that we recognize that the land of the free and the home of the brave may be in need of some global-neighborly assistance. And so I think the program can potentially be a powerful and useful tool in this regard.
Doing the math, if the program were maxed out every year, it would generate several billion dollars in extra income for the economy, and would provide at least 100,000 new jobs each year. A shining example of success in this field is Can-Am Enterprises, a firm which recently partnered with the Regional Center in Plattsburgh, NY. Can-Am has already raised over $675 million and has represented over 1,200 immigrant investors under the program. Why this program isn’t promoted enough is a great mystery to me.
Another positive point about the EB-5 visa program is that it is relatively fool-proof. Many other visa avenues have been subject to abuse. For example, the fiancé visa category has always been riddled with fraudulent marriage arrangements, and people notoriously overstay their tourist visas. On the other hand, it’s not that easy to fabricate a million dollars just to receive a green card. And the Regional Centers do thorough accounting checks to make sure that the applicants are not bogus and have clean money.
Also, the spectrum of allowed investment projects is very broad. Past projects under the EB-5 program have included the Jay Peak Ski Resort and even mass investing in foreclosed homes (hint, hint). The possibilities for creative investing are nearly endless.
Finally, there is some concern that the program may send the message that America is broke. I don’t think that is a major concern for the U.S., because frankly, pretty much everyone knows our economy is hurting. On the contrary, I believe the EB-5 program can do much to encourage a more global outlook and promote a more internationally-based exchange of ideas and resources.
One thing that can be done to promote the program is to move it up higher on the list of visa preference categories, or incorporate it into one of the higher categories (it’s currently ranked as the fifth preference under the Employment-Based immigration visa designation). In the meantime, we should all be aware that many of the successful business enterprises we see around us might actually be the products of immigrant investment.