EB5 Investors Magazine Volume 3 Issue 3 | Page 60

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. 58 EB5 INVESTORS MAGAZINE