Real World Impacts of the EB-5 Immigrant Investor Program

Important Update: On July 23rd, 2019, U.S. Citizenship and Immigration Services (USCIS) issued sweeping new changes to the EB-5 Program. These changes included an increase in the minimum investment amount.

We recommend reading our newest post for a full discussion of the changes.

There are a few different ways that immigrants can arrive in America. Relatives and immediate family members can join their family in the United States if they meet certain conditions, and foreign nationals can also apply for skilled work permits and visas. Both of these immigration paths are common around the world.

But the U.S. offers a unique pathway into the country that not many other countries share. The Immigrant Investor Program (EB-5 Program) was created in 1990 and applies to foreign investors who wish to move to the U.S.

To apply, a foreign national must be in good financial standing and be willing to invest a minimum of $1 million into a regional project. In certain cases, this figure is lowered to $500,000 when the project happens to lie within a Targeted Employment Area (TEA). A TEA is an area that has high unemployment or is in a rural location.

Therefore, one of U.S. Citizenship and Immigration Services’ (USCIS) requirements is that the investment creates at least 10 full-time jobs designated for U.S. nationals.

The investment for the EB-5 Program is not limited to cash. Investors can also choose to give inventory, secured indebtedness, equipment or intangible property to the project.

The Effects of the EB-5 Program on the American Economy

The goal of the EB-5 immigration pathway is to stimulate the U.S. economy in exchange for a green card. Investors can choose to invest in corporations, limited partnerships, sole proprietorship or another business structure whether publicly or privately owned. However, all of the enterprises available for investment must have been formed after November 29, 1990.

This program has become an important asset in the securing of investment for different development projects in America. By default, it attracts large sums of money and creates a large number of jobs.

It has become especially important since the Great Recession because the U.S. has suffered difficulties in finding domestic financing. The EB-5 Program allows the country to take advantage of the aspirations of the rising amount of wealth in developing countries.

Further Economic Growth

But it is not just the initial investments that add to the American economy. When those investors reside in the U.S., the income that comes from the money they spend in their daily lives also works to stimulate the economy.

To qualify for the visas, investors must have an income that exceeds at least $200,000 per year for two years. The total household income requirement is $300,000, which means that these investors have more cash to spend in the market than do other types of immigrants.

On average, the household expenditures for each family that arrives under the EB-B Program creates four jobs. The rest of the money that is spent by the household creates a further two jobs. As a result, this investment means that the natural living expenses of each family creates six jobs and generates an average of $54,697 in state taxes.

Total Growth from the EB-5 Program

To begin to understand just how much this immigration pathway can add to the American economy, it is important to look at the economic input as a whole. For every EB-5 visa issued, 18 jobs are created. The contribution to the GDP from this single household alone is $1,464,511.

According to the Department of State, 2,695 of these visas were granted to foreign nationals in 2011 alone, resulting in around 878 new high-income households in the United States. The immigrants who utilized these visas ended up creating 15,541 new jobs and adding $1.286 billion to the national GDP.

It is clear that the unique EB-5 Program is not just a convenient pathway to naturalization but an essential part of the American economy. Continuing to encourage foreign investment through this method can help revive TEA areas and help regions grow.

Are you interested in the EB-5 Program?

If you are interested in the EB-5 Program and need assistance navigating the overall process, contact us today at one of the ways below. We are here to assist every investor with their unique needs.

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Disclaimer: Nothing in relation to the enclosed information should be construed and or considered as legal advice for any individual, entity, case, or situation. The following information is prepared for advertisement use only. The information is intended ONLY to be general and should not be relied upon for any specific situation. For legal advice on your specific situation, we encourage you to consult an attorney experienced in the area of Immigration Law.