There is an old saying that goes, “It is better to light one candle, than to curse the darkness.” And there is a lot of darkness around these days. The world is experiencing the worst economic decline since the great depression. Well over 10 million Americans are unemployed. The country needs economic revival, is sinking into debt and could use a lot of new jobs. Of all the options available to America in the area of immigration, the EB-5 investor immigrant program is the one that can best serve as the light in the face of this darkness that has beset us.
Investor Immigration to the Rescue
While investor immigration is not a complete solution for all of America’s problems, for decades now, the U.S. EB-5 program has served the country well by creating jobs and stimulating economic development. Indeed, as a letter from U.S. lawmakers recently pointed out, “Between 2008 and 2015, as the nation struggled with its last economic downturn, the EB-5 Regional Center program was directly responsible for $20.6B in economic investments and creating or saving 731,792 jobs.” Currently each investor who comes to America invests a minimum $ 900,000 U.S. and creates 10 new American jobs under the regional center part of the program, or $ 1.8 million and 10 new American jobs under the direct investment part of the program. It is no secret that investor immigration can be a great stimulus to a country’s economy. For that reason many other countries are competing with America in this field., countries like Great Britain, Canada, Australia, New Zealand, Portugal, Turkey, Malta, Bulgaria, Antigua and St. Kitts and Nevis, just to name a few.
What About American Citizenship Not Being For Sale?
An investor visa program is not a citizenship program. Applicants still must accrue five years of residence in America before they become eligible to apply for U.S. citizenship. Furthermore, they still need to maintain two and a half out of five years of physical presence to be eligible to apply for citizenship. As for the concern of investors being able to buy their way into America, the point to be made is that the EB5 program is not an ‘America-for-sale’ program, it is a ‘jobs-creation-program.’ On top of that, investors have never made up more than just a small fraction of the total number of immigrants who come to the country. Indeed of the approximately one million immigrants who come to America each year, only 10,000 are investors. In fact, often wealthy investors are not attracted to immigrate to America for themselves per se, they are more attracted to immigrate for the sake of their family, especially their children. For them, North America offers better education opportunities, good health care, strong economic prospects, a clean environment and access to large markets. For us, they bring jobs and investment. Most importantly, the program pays for itself.
Public Interest Targeted Projects
Possible modernization of the investor program offers a tremendous opportunity to match significant investment from investors to projects serving a defined public interest. One example of this strategy would be to use foreign investor funds to address the overstretched U.S. infrastructure funding gap of more than $2 trillion needed by 2025. The EB-5 program could help solve the problem at no cost to the taxpayer.
Efforts to Modernize the EB-5 Program
Recently, U.S. Senators Chuck Grassley (R-IA) and Patrick Leahy (D-VT) introduced a bipartisan EB-5 Reform and Integrity Act of 2020 to improve and promote the EB-5 program. Over many years the two senators have tirelessly worked together to strengthen the integrity of the EB5 investor immigration program. The Act ws just the newest iteration of their efforts. There were several key benefits the bill offered:
Key Benefits of the Grassley-Leahy EB-5 Bill
1) A 5-year reauthorization of the program, converting it from a temporary sunsetting program that continually needs to be reauthorized, into a more permanent program.
2) Reasonable reform measures enabling the industry to operate with reasonable oversight. These include third party audits, requiring clear information to be provided to investors about the progress of projects, requiring more definitive records illustrating an investor’s source of funds, and scrutiny for and protections against threats to national security.
3) Good faith Regional Center and New Commercial Enterprise protections.
4) Innocent investor protections for debarred projects including age-out protection for children, priority date retention and use of recovered funds for another investment.
5) No retroactive application to investor petitions.
6) Regional Center oversight under a reasonableness standard.
7) No strict liability of Regional Centers for third party acts.
At the same time, a bipartisan group of lawmakers from the U.S. House of Representatives expressed their support for the EB-5 Regional Center Program in a letter sent to the Chairwoman and Ranking Member of the House Committee on Appropriations. In their letter, the lawmakers pointed out that, “With the necessary reforms and a long-term reauthorization, it is possible to see more than $9 billion in investment and as many as 300,000 jobs saved or created each year after enactment.” The letter was signed by ten lawmakers including U.S. Representatives Tom O’Halleran (D-AZ-01), Brian Fitzpatrick (R-PA-01), and Dwight Evans (D-PA-03) who led the initiative. It concluded, “We request that you include the EB-5 Regional Center program’s reform and long-term reauthorization in the next appropriation measure.”
Neither the Grassley/Leahy bill nor the congressional initiative were successful in changing the terms of the program, although the EB5 program was extended again until June 30th, 2021. In coming to its defence before it was extended, Bob Kraft, president of IIUSA, a national not-for-profit EB-5 association, pointed out that, “Mayors from around the country, including the U.S. Conference of Mayors, trade associations, chambers of commerce, travel organizations, health care organizations, and many others stand with IIUSA to support this reauthorization.” In short, there is a lot of support for the EB5 program and its reform.
This is not the first congressional rebuff that Grassley and Leahy, or for that matter, the EB-5 investor community have been through. For years efforts to modernize the EB-5 program have been met with defeat. There is wide-spread agreement around the integrity measures the senators are proposing. Unfortunately, Congress is just too tied up to find the time to address the need. But now that the need is at its greatest, maybe under the new administration, the EB-5 program can become the light needed to fend off this Covid-19 economic darkness, at least when it comes to immigration. Let’s hope so.