Despite significant differences in policies and practices, there are some areas, like measures that boost investment and enhance job creation without putting additional strain on the economy or the tax payers, where members of the Congress from the Republican and the Democratic parties adopt a bipartisan approach. This is why the renewal of the US investment immigration program, which is set to expire in September, 2015 unless reauthorized by the Congress, is expected to be a smooth and consensual affair.
The EB-5 program, as the federal immigrant investor visa is popularly known, attracts significant amounts of FDI, creates jobs in targeted areas, and facilitates economic development in urban and rural areas. The program offers permanent residence over an accelerated timeframe of just five years to applicants creating and maintaining at least ten jobs in America after investing $500,000 to $1 million in US businesses.
The EB-5 visa, which was introduced in 1992, has always enjoyed support from the principal parties in the USA from the very beginning. While demand remained low for a long time, combination of factors like drying up of conventional sources of funding for businesses during the recent recession and suspension of other popular investment immigration programs led to a significant increase in demand for EB-5 visas, especially amongst wealthy investors from China.
Between 2010 and 2013, the US investment immigration program has attracted FDI of around $10 billion, and has contributed to creation of around 29,500 jobs every year. Demand for the program has witnessed an exponential rise after the 2008 recession. Analysts estimate that the first six months of FY2015 led to inflow of more than $1.8 billion of FDI from EB-5 applicants. This represents an increase of $400 million and $1.1 billion as compared to the first half of FY 14 and FY 13 respectively. Applicants on the USCIS waiting list represent investment of more than $6.5 billion awaiting approval from the authorities.
The program’s popularity and economic benefits has led to support for its renewal from all sides of the political spectrum. With the sunset date, 30th September, approaching, industry watchers expect the Congress to renew the program quickly. Apart from the advantages of inflow of FDI, the EB-5 program also serves as a useful source of capital for businesses in the USA. Today, projects requiring significant capital investments require access to diverse financing options to mitigate risk and improve pace of execution. The utility of EB-5 visas is evident from the fact that it serves as a virtual lifeline for commercial real-estate ventures that struggled to acquire funds from conventional sources after the 2008 recession.
The EB-5 program mandates applicants to allocate investments to targeted areas based on extent of unemployment and other economic factors. This has led to inflow of valuable capital into projects in areas and regions that have invariably struggled to attract funding for big-ticket projects and ventures.
EB-5 visa applicants are funding a wide range of projects ranging from hospitals in Arizona to ethanol plants in North Dakota. Apart from direct benefits like job creation, such projects offer many long-term benefits including clean energy and improved standard of living in depressed areas.
Local authorities treat the EB-5 program as a valuable economic tool for facilitating local development. Bodies like the U.S. Conference of Mayors and the National Association of Counties have indicated their support for the program’s renewal through public resolutions.
While the utility of the EB-5 visa is widely acknowledged, there are concerns about misuse of the program leading to national security risks. Supporters of the program acknowledge the need for reform, improved oversight, and better enforcement of rules related to its implementation. However, there are fears that excess regulation may negatively impact the program’s contribution to the nation’s economic development.
With inflow of billions of dollars of FDI into a large number of projects, the Congress is expected to come up with an improved version of the renewed EB-5 visa that will continue boosting growth and creating jobs in the USA.
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Source: Huffington Post