If you were a foreigner who wanted to move to the United States, how much would it be worth to you?
The EB-5 visa program, which was introduced in pilot mode in 1990 and has been extended several times since, allows immigrants to trade investment dollars for visas. Foreigners who invest $500,000 to $1 million in private or public U.S. enterprises can receive permanent legal residency in return. Spouses and children of qualifying investors also receive visas.
The minimum investment for most businesses is $1 million, but those who invest in designated “regional centers” or who establish businesses in economically disadvantaged areas can put in as little as $500,000 to qualify for the program. Investors are required to show that their money created or preserved 10 U.S. jobs after two years.
In spite of the fact that the program is 20 years old, for most of that time few took advantage of it. The law allows 10,000 EB-5 visas to be granted each year, but in the fiscal year that ended Sept. 30, 2008, only 1,443 immigrants actually received visas through the program. Then, in 2009, the program was “discovered,” according to Demetrios Papademetriou, president of the Migration Policy Institute, a Washington think tank that recently released a report about the visa’s growing popularity.
“What happens with programs like this is that sometimes, all of a sudden they get discovered, and then intermediaries begin to really promote them both here and internationally,” Papademetriou told The Washington Post. In fiscal 2009, nearly three times as many EB-5 visas were granted as in the previous year.
In the past, the program was hampered by rules that were inconsistently applied and so complex that few could understand them. But, as improvements to the program coincided with the recession, businesses here and investors abroad scrambled to take advantage of the opportunity. In just a few months, the number of certified regional centers increased from 23 to 74.
Regional centers include enterprises that promote economic advancement, particularly in less affluent areas. The Anacostia Economic Development Corp. in Washington D.C., for example, pursues real estate development projects in the southeastern part of the city, which has the area’s highest unemployment rates.
The EB-5 program helps investors and businesses. It provides a path to permanent U.S. residence for foreigners who want to have a stake in this country, and it allows businesses that may not be able to promise high rates of return to find investors for their projects. With many in the U.S. still nervous about putting their money into new business ventures, the extra boost from overseas is particularly important now.
Eric Canal-Forgues, a French law professor and businessman, helped finance the construction of Comcast's headquarters in Philadelphia through his participation in the EB-5 visa program. He expects that he will receive only a 1 percent return on the investment, but, after moving with his family to Miami, he said, “It was worth it to me.” The program allowed him to move to the country where he wanted to raise his children, while also giving him the opportunity to provide capital to support that country’s development.
It is unfortunate that this program lay nearly dormant for so many years, but I am glad to see that it is now out in the light. I hope it continues to grow and that the 10,000- visa allowance will be expanded.
Sens. Patrick J. Leahy, D-Vt., and Jeff Sessions, R-Ala., have backed the program. EB-5 visa holders invested millions of dollars to renovate and build ski resorts in northeastern Vermont, providing important support for an economically struggling area. “At a time when we're seeing so many of our jobs exported out of the country, this creates jobs in the United States,” Leahy said.
The EB-5 program helps to bring immigrants who already have money to invest to the United States, but I believe we would also benefit by admitting more immigrants who, though lacking large sums of money to invest, nevertheless have the energy, work ethic and entrepreneurial spirit necessary to succeed in this country. That sort of human capital is just as valuable as money, and harder to come by. Immigrants can help transform distressed neighborhoods and regions into vibrant business centers by participating in the economy as consumers and as entrepreneurs.
In August, I wrote about my idea for a modern Homestead Act that would give all immigrants, not just those with capital, a chance to build new lives and new economic opportunities in the United States. But in the absence of more sensible immigration laws, we'll take the money.