Selling America Short: The Failure of the EB-5 Visa Program (2012)

The full report is available in pdf format.

Background

The Employment Based 5th Preference (EB-5) Visa, also known as the Immigrant Investor Program, was established by Congress in 1990 to grant foreign nationals legal permanent residency (LPR) status for investing in the U.S. and creating jobs for at least two years (INA §203(b)(5)).

The investment must either:

(i) create a new enterprise with a direct investment of $1 million that results in the employment of at least 10 U.S. citizens, LPRs, or other work-authorized aliens in full-time positions, excluding the investor and his/her spouse or children, for a period of two years, or;

(ii) invest $500,000 with a Regional Center in a “targeted employment area,” defined as an area with an unemployment rate that is 1.5 times the national unemployment average, with the same job creation requirements.

In 2003, Congress allowed EB-5 investors to invest in “troubled businesses,” defined as a business that has been in existence for two years and must have incurred a net loss of at least 20% of the business’ net worth during the twenty-four months prior to the application. The investment must preserve at least 10 jobs (8 CFR §204.6(e)).

February 2012