On May 7, 2020, it was reported that 4 Republican US Senators – Tom Cotton, Ted Cruz, Josh Hawley and Chuck Grassley – had written to President Trump, advocating the suspension of several US immigration programs, including the valued EB-5 immigrant investor visa program. In this article, we will examine some of the claims made about the EB-5 visa program in the letter and dispel some common misconceptions.

  1. Myth #1: The EB-5 Program Enables Investors To “Buy” US Citizenship

In their letter, the Senators argued that the EB-5 program was effectively a means through which US citizenship could be purchased. This suggestion not only does a disservice to the valuable contribution made to US society by foreign investors (whose investment generally acts as an economic stimulus, generating jobs & facilitating the development of local infrastructure), but is also dangerously inaccurate.

The EB-5 Program does not enable foreign nationals to “buy” US citizenship or, indeed, purchase a Green Card. The EB-5 Program is a merit-based visa program, which enables foreign nationals whose investments have conferred tangible benefits upon US society (including the creation of jobs) to apply for US lawful permanent resident status. Globally, many countries offer such programs to incentivise foreign investment and generate economic growth, including the UK.

In order to qualify for a Green Card through the EB-5 visa program, the investor must, inter alia, make a substantial “at risk” investment (in the region of either $1.8 million or $900,000, subject to the nature of the investment), which leads to the creation of 10 full-time jobs for US citizens or lawful permanent residents. EB-5 requirements are strict and applications are rigorously assessed, prior to issuance of an EB-5 visa.  Given that visa issuance is contingent upon an “at risk” investment which leads to the creation of 10 full-time US jobs, it is not uncommon for foreign investors to lose some or all of their investment, without ever receiving a Green Card.

The EB-5 program has conferred a wealth of benefits on the US economy. According to figures published by Invest in the USA, since 2008, over $37 billion has been invested in the US economy by foreign nationals, as a result of the EB-5 visa program. Indeed, after the 2008 recession, the EB-5 program was welcomed by many developers who sought capital investment and were unable to secure funding via orthodox routes.

It is important to note that a successful application for an EB-5 visa/status confers US lawful permanent resident status only, and that is only upon successfully having conditions removed after 2 years. To qualify for US citizenship thereafter, an applicant would need to meet further eligibility requirements.

  1. The EB-5 Program is “plagued by fraud”

There is no evidence to support the assertion that the program is “plagued by fraud”. As noted above, EB-5 application requirements are onerous. Applications must be supported by a wealth of evidence in order to succeed and are subject to high levels of scrutiny. The burden is on the applicant to satisfy the adjudicator that each and every requirement of the EB-5 program has been met.

Moreover, a number of anti-fraud safeguards are in place and are constantly evolving. As recently as last year, the Immigrant Investor Program Office introduced new training, additional staffing and new policies, including increased inter-agency coordination, to reduce the risk of fraud.

While it is impossible to entirely eradicate the risk of fraud from any visa program, the EB-5 program is one of the most stringent investment visa programs in the world, and there is no evidence to suggest there is systematic abuse of the program.

Conclusion

In conclusion, the claims made by the Republican Senators in their letter to President Trump are entirely unfounded. Indeed, in light of the devastating impact of Covid-19 on the US economy, there is a real possibility the EB-5 program, if utilized rather than demonized by politicians, could play an instrumental role in fuelling US economic recovery, as it did post the 2008 recession.

Davies Legal Immigration

At Davies Legal Immigration, we offer a “one stop shop” for all aspects of US business immigration. Our team comprises US immigration attorneys and business/tax experts. We offer a variety of fixed fee packages tailored to your unique position and offer innovative immigration solutions. Call now to discuss your case with a licensed US immigration attorney and take the first steps towards achieving your own American Dream.

Published: 17th May 2020