U.S. EB-5 Investor Immigration Needs Renewal And Overhaul
Originally published on Forbes.com on February 28, 2021.
By Andy J. Semotiuk, Contributor, Forbes
A key problem that has been plaguing the EB-5 investor immigration program is how long it takes to get a green card. Caps imposed by Congress on the number of applicants that can come from each country have caused long delays that have significantly eroded confidence and predictability in the U.S. immigration system. Backlogs in processing applications, such as those for applicants born in China or Vietnam for example, have resulted in wait times of many years. Obviously, more EB-5 immigrant visas need to be issued. But how?
First Things First
Before that question can even be addressed, however, a more urgent issue has to be dealt with, namely the automatic expiry of the entire EB-5 program by June 30th, 2021. One good way to deal with that question is to support the Grassley-Leahy bill that includes a five year extension of the program being considered on Capitol Hill at the moment. Congress and the EB-5 community will then have more time to further refine the priorities for the program including addressing the backlogs. Until the Grassley-Leahy bill is passed, however, nothing else can realistically be expected to be implemented.
Assuming The Program Is Renewed
Assuming the June 30th deadline is met, President Biden’s Citizenship Act of 2021 offers some creative proposals to access more visas for EB-5 investors. In Biden’s bill he proposes to change the numbers count pertaining to the 10,000 yearly immigrant visas allocated to investors, reclaim lost visas from prior years and eliminate the country cap on employment-based immigrant visas issued each year. Each one of these proposals is worth separate consideration.
In regard to the numbers, the bill proposes to change the count to include only the principal investors. Family derivative members would be excluded from the count of 10,000 immigrant visas issued annually. Assuming each family on average consists of four people and that three would therefore be excluded from the count, that would open up 7500 more visas for principal investors each year. They could bring their families, it is just that the family members would not be counted as part of the 10,000 maximum as they are now.
Reclaiming Lost Visas
In regard to reclaiming lost visas from previous years, with the exception of 2014, the U.S. Citizenship and Immigration Service has failed to reach the 10,000 maximum cap on the number of visas issued to EB-5 applicants per year. The further back one goes, the fewer visas there were issued to applicants. The Biden bill proposes to count unused visas back to 1992 when the regional center program was introduced. This is particularly significant in terms of counting unused visas from 1992 to 2010 since the program was significantly under subscribed in those years. You almost have to be an Einstein to calculate what the lost numbers are in the Biden bill and in the system as it is. As a very rough calculation, however, from 1992 to 2010 on average there were less than 2000 EB-5 immigrant visas issued. This count of visas included not only principal investors but also their derivative family members. So there was about an 8000 visa shortfall each year for 18 years. That would mean a recovery of at least 145,000 visas for principal applicants due to a miscount over the years.
Eliminating Country Caps
As for Biden’s bill and other proposals to eliminate country caps in employment-based immigrant visas, this is a work in progress. The basic goal is to eliminate the unfair backlogs faced by Chinese and Indian workers, for example, while not overly impinging on access to such visas by nationals other countries. The successful formula may involve a staged introduction with a visa pool set aside to shelter nationals from countries. This would help them from being overly disadvantaged by the reorganization of employment immigrant visa priorities.
Such small steps could drastically alter the landscape and success of the EB-5 investor immigration program. As Congress moves forward on its legislative agenda, other areas of economic recovery and focus will be considered. These other areas offer the EB-5 community a chance to participate in the remaking of America and to offer the EB-5 program as a tool for future prosperity. The projected Congressional consideration of the state of America’s infrastructure for example, provides such an opportunity.
Using EB-5 For The Infrastructure Deficit Challenge
Let’s face it. If we have learned anything from the huge winter storm that just swept across the U.S., it’s that America needs to repair its failing infrastructure. How bad is it? Well, 58 people died, over four million people lost power and millions more went without drinking water. Indeed, an excellent TikTok presentation quickly summarizes the salient facts here. And that’s not the half of it. Experts say that U.S. infrastructure is dangerously overstretched, with a funding gap of more than $2 trillion needed by 2025. Where are we going to get that kind of money? Part of the answer is the U.S. EB-5 investor immigrant program.
America needs a reorientation of at least part of the EB-5 investor immigration program to use foreign investor dollars to undertake locally approved infrastructure projects, like building and maintaining roads, bridges and power plants. It is not necessary to reorient the entire EB-5 program to address infrastructure. But it would be possible to reshape the program to offer investors and regional centers an extra incentive if they chose to undertake infrastructure projects. A menu of such projects could be published by governments and regional centers could be invited to bid on the work. Successful bidders could then be chosen, and as an extra carrot, be approved for raising funds through the EB-5 program. Such awarded contracts could include an expedited processing element to benefit those investors interested in supporting such work. This kind of creative thinking could be used to address other American problems as well.
The EB-5 Program Deserves Support From All Quarters
In short, the EB-5 investor immigration program is an excellent tool that can be used to address many of America’s most difficult problems. It is a program that is self funded and can bring billions of dollars to the United States while creating thousands of jobs for American workers. It is a program that has found support from Republicans and Democrats. And it is worthwhile for America as well as for investor immigrants.