Written by Taher Kameli
America needs help, here comes EB5?
The “EB-5 Program” refers to employment-based immigration under section 203(b) of the Immigration and Nationality Act (codified as 8 U.S.C. § 1153(b)). The EB-5 Program has been in existence since the 1980’s, and until recently, long-term stakeholders in the community thought that they had seen it all. But with the pandemic continuing to impact every sector of the U.S. and global economy, industry experts are now required to speculate as to how the EB-5 Program will be impacted.
Based on this introduction, one would expect the next couple paragraphs to outline how Covid-19 negatively effects the benefits of the EB-5 Program, continuing the theme of dread Covid-19 rightfully so brings. However, there is another side to this story. There could be an argument that the EB-5 Program can actually become a resource during this global pandemic for the U.S economy.
As you might already know, the EB-5 Program, administered through the U.S. Citizenship and Immigration Services (“USCIS”), has become an increasingly important source of investment for development projects in the United States, attracting billions of dollars to the U.S. economy and creating tens of thousands of jobs in the United States.
To qualify for the EB-5 program, immigrants can invest directly in a job-creating business or can invest through regional centers approved by USCIS to promote economic growth in designated areas. This program provides an influx of revenue and jobs that the U.S. surely needs during these times while also providing citizenship to investors who are helping create jobs in the country.
Anticipated pushbacks against the EB-5 Program
The EB-5 Program could be a potent tool to support the economy recovery but faces a number of political and administrative challenges. The U.S economy and labor markets obviously benefit from a program that incentivizes foreign investors to invest in capital-starved U.S. business that will create jobs for U.S. workers. But politicians get short-term benefits from talking points than from facts. Immigrant investment does not fit the current Republican rhetoric, which currently paints most immigration topics as a threat, providing a scapegoat to distract from the conundrum that Covid-19 presents.
Additionally, immigrant investment does not exactly match Democratic rhetoric, which avoids being seen to side with business interests and wants to be seen supporting the most vulnerable citizens first. EB-5 investors are a practical help to everyone but also politically awkward for all sides.
Many EB-5 projects involve small businesses and most employ vulnerable workers. EB-5 investors come from around the world and tend to be upper middle-class professionals and still only use a tiny percentage of total visas.
The visas cannot be bought at any price, only granted in exchange for job creation, which cannot be emphasized enough. Most headlines instead shoot out words like fraud, scandal, buy-a-visa, pay-to-play, super-rich. Out of many thousands of EB-5 projects, the 20 with salacious features get covered. Where headlines lead, our government representatives follow. EB-5 Program will thrive if the industry gets much better in their public relations efforts, showing a true picture of the program that legislators can come out and support.