The Congressional Research Service (CRS) on December 16, 2021, released a report with updates on the EB-5 immigrant investor visa program. The program enables a foreign national investor to obtain lawful permanent residence in the United States if he or she invests a requisite amount of capital and meet certain requirements, including creating at least 10 jobs.
The EB-5 program has continued to be the subject of ongoing policy debates. According to the CRS report, supporters of the EB-5 classification maintain that it fosters U.S. economic growth and generates jobs. Critics, on the other hand, argue that the EB-5 program enables wealthy investors to buy their way into the United States. Critics have also pointed out the potential for fraud and threats to national security. Some have called for the visa category to be eliminated.
The fraud risks associated with the EB-5 program arise from challenges with verifying that investors’ funds are procured lawfully. Further, the EB-5 program’s potential for large monetary gains could cause and has caused individuals to take advantage of investors. While U.S. Citizenship and Immigration Services (USCIS) has taken steps to improve fraud detection, the agency has also been constrained by various statutory limitations.
Visa application processing delays due to the suspension of consular services amid the COVID-19 pandemic have also affected the program. The CRS report stated that EB-5 stakeholders have expressed concerns about the impact of the delays on time-sensitive business projects and the risk of losing unclaimed visas to other employment categories. Ten thousand EB-5 visas are available each year for foreign national investors and their family members, making up 7.1 percent of all employment-based visas. The program is divided into individual investors making qualifying investments, and Regional Centers create projects approved by USCIS into which each investor can make his or her investment. The Regional Center approved project can then count at least 10 U.S. worker jobs created indirectly. While the individual investor program is permanent, the Regional Center program is not and is subject to periodic Congressional re-authorization. Currently, the Regional Center Program has lapsed.
Additionally, the pandemic has led to economic downturns in the hospitality industry and commercial real estate construction projects, which attract many EB-5 investments. As a result, the program’s job creation requirements have also been a cause for concern.
The Regional Center Program is the most common pathway in the EB-5 visa category, accounting for 96 percent of such visas in fiscal year 2019. But industry stakeholders are dissatisfied with the uncertainty created by the short-term re-authorizations of the program.