In 1990 Congress created the EB-5 immigrant investor program. Their goal was to stimulate the US Economy, and the capital investment from foreign investors was cited as a good way to do that. The program itself gives easy green card access to foreign nationals, and their families, who invest $500,000 in US Development projects that meet certain qualifications and create/preserve 10 permanent American jobs. There are typically around 10,000 EB-5 visas available for investors each fiscal year.
Some of the controversies are tied to the way the program favors wealthy foreign investors, and in China last year it was reported that Jared Kushner’s sister promoted the program to Chinese investors during a business meeting. The report said she specifically encouraged the wealthy Chinese citizens to invest $500,000each in luxury housing developments in New Jersey, with the intention of getting a fast-track EB-5 visa.
However, the main issue with the EB-5 program is related to millions of dollars worth of investment fraud. The US Securities Exchange Commission took action against fraudsters amounting to hundreds of millions of dollars. A Vermont Ski Resort received a $350 million asset freeze and an unregistered Florida broker-dealer got a $79 million charge. The fraud doesn’t stop there; in 2013 the agency published a report explaining the fraud within the program. Since then the fraud has continued to worsen.
The program was designed to provide investors with visas almost immediately, then allow them to obtain a permanent residency green card in about two years. To date, approximately 85% of EB-5 green cards have been issued to Chinese foreign nationals.
The controversial EB-5 program was extended last March but it expired on September 30th, 2018. Congress must now decide whether to restart the program or keep it retired.
Should the program continue, there are likely to be significant changes in the way the program is organized. The updates may include changes like increasing the investment sum from $500,000 to $1,350,000 and encouraging more rural investments.
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