EB-5 INVESTOR SCRUTINY
Let’s Get the Truth Straight:
Correcting Common
Misconceptions about EB-5
by Reid Thomas and Kaitlin Halloran
As the EB-5 program has grown, increased scrutiny from the
SEC, several high-profile fraud cases, and the hotly debated
Congressional renewal of the EB-5 Regional Center Program
have demonstrated that new standards for security, transparency,
and compliance will be required of the EB-5 program.
The EB-5 industry itself has advocated extensively for reform and
for best practices to protect investors and ensure program integrity.
The EB-5 program is a highly effective job creation engine
and delivers many economic benefits to the U.S. economy
at no expense to the taxpayer. However the program’s rapid
growth has prompted increased public attention on EB-5, and
misinformation abounds. Unfortunately, misconceptions about
the EB-5 program damage its reputation and undermine its
positive impacts.
COMMON MISCONCEPTIONS ABOUT EB-5
FICTION
FACT
The EB-5 program allows foreign
nationals to “buy” American
citizenship.
The EB-5 program does not offer citizenship for a price. Instead, it provides foreign investors
the opportunity to qualify for conditional permanent residency by making a $500,000-$1 million at risk investment in a business that will create American jobs.
If the investment meets job creation and other requirements at the end of a two-year
conditional residency period, investors can then qualify for permanent residency, and subsequently apply for citizenship.
Immigrants can use EB-5 as a
shortcut to “buy their way” to
the front of the visa line.
While EB-5 may be a quick path to a green card for many investors, lengthy USCIS processing
times, a visa backlog for Chinese-born investors, and a mandatory two-year conditional residence period extend the EB-5 timeline to upwards of five years for most investors.
Use of EB-5 visas does not impact visa backlogs for other visa categories: while unused
EB-5 visas can be reallocated to other employment-based immigration categories, visa
numbers allocated to EB-5 form such a small segment of all available employment-based visas
(10,000 out of 140,000, or about 7 percent) that reallocation is unlikely to significantly impact
visa availability for other categories.
Though both EB-5 and H-1B visas are related to employment, EB-5 visas have no impact
on H-1B visa availability. H-1B is a non-immigrant visa category, and availability is not impacted by issuance of employment-based immigrant visas, like EB-5.
EB-5 is an easy way for terrorists
to enter the country.
EB-5 investors are subject to significant scrutiny throughout the EB-5 process from the USCIS—
which is itself run by the Department of Homeland Security (DHS).
The EB-5 vetting process includes the most detailed and thorough review of the immigrant of any visa category. The process includes a comprehensive review of the documentation of a legal source for the investor’s funds, in addition to background checks, in-person
interviews, health and biometrics. Moreover, this detailed review occurs twice in the process,
once upon application for conditional residency, and then again two years later at the removal
of conditions phase.
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EB5 INVESTORS MAGAZINE