Last year more than 3.25 billion in economic development projects was funded through the EB-5 Program. As Canada's foreign investment programs have been closed earlier this year, the U.S. EB-5 program remains a core program to attract foreign investors to the United States.
The federal EB-5 immigrant visa program is designed to provide legal permanent residents (green cards) and a path to citizenship for foreign nationals who invest at least $1,000,000 in a qualified U.S. business and create 10 new full-time jobs as a direct result of the investment. The minimum investment is lowered from $1 million to $500,000if the foreign investment is made in a business that is located in a rural or high-unemployment target area.
There are two ways a foreign investor can make an EB-5 investment depending on how actively an investor wants to participate: Direct Investment and Regional Center Investment. Direct investment is usually for those who want to be involved in day-to-day management or running an active business. A Regional Center investment involves minimal management requirements. Foreign investors in a Regional Center project are not required to live in the place of investment; rather, they can live wherever they wish in the U.S. Most importantly, because a Regional Center investment counts both indirect and direct jobs, it allows the investor to qualify by proving a combination of 10 direct and/or indirect employees. A Direct Investment only counts jobs that were created directly as a result of the investment. Because of these advantages of Regional Center investments, over 90% of EB-5 investments are made through Regional Centers to rural or high-unemployment target area-based projects.
To participate in the EB-5 program, foreign investors first file a petition with USCIS to obtain EB-5 green cards for the principal investor and his/her qualifying immediate family members (spouse and minor children). USCIS reviews each EB-5 petition to determine whether the investment was made into an approved/qualified U.S. business, whether the $1million/500,000 is at risk and being invested or in the process of being invested at the time of application; whether funds have been obtained through legal means; whether 10 new jobs will be created as a direct result of that investment or spur either a 40% increase in net worth or employees the investment was made in a business which has been purchased and restructured.
Congress allocates 10,000 EB-5 visas annually; however, the program has been underutilized and has never reached this cap. According to the USCIS, in FY 2013, 6,346 foreign investors filed petitions, which accounts for more than $3.25 billion in capital formation, and 3,699 EB-5 visas were issued, which accounts for about $1.83 billion.
As the EB-5 program requires would-be foreign immigrants to invest at least $1,000,000 in a qualified U.S. business and create 10 new full-time jobs as a direct result of the investment, the numbers of issued visas mean not only capital investment but also job creation in the U.S. For FY 2014 (October 2013 through June 2014), USCIS has received 7,688 applications and issued 4,015 EB-5 visas.
According to a study, in 2012, over 42,000 jobs were created, added over $3.39 billion in GDP and generated more than $712 million in federal/state/local tax revenue through the EB-5 program.