Calls for reforming the US investment immigration program are increasing with the EB-5 program coming under criticism for deviating from its original purpose. Growing demand for a hike in the minimum investment required under the program is being justified on the grounds that immigrants should be required to pay more money to become residents of the most developed country in the world.
Currently, foreign investors can obtain green cards, which offer permanent residency to the holder in the USA, by investing a sum of $1 million in a project that results in creation of just 10 permanent jobs. The minimum investment requirement is reduced by half if investors invest in a rural area or choose an urban area that has 1.5 times the national unemployment rate. The latter option too requires the creation of 10 jobs from the project.
A special report by Seattle Times discovered that EB-5 rules related to high unemployment areas are being bypassed by combining small census blocks plagued by high unemployment rates with a location or destination with a strong economy. Most EB-five program projects are being, as a result of this interpretation, constructed in regions with strong and healthy economies.
There is a growing perception that the original intention of the program is being bypassed, which has the effect of undervaluing the importance of acquiring the right to reside in a country like the USA. Enacted in 1991, the EB-5 program is set to come up for renewal in September 2015. It is currently undergoing an audit by the Government Accountability Office.
In 2011, lawmakers sponsored a bill seeking to convert the program into a permanent part of the immigration policy. Lawmakers have indicated that they will support the continuation of the EB-5 program. Supporters say that the program plays a significant role in creating jobs in the country. However, critics are seeking the following changes as a condition of renewal of the program.
- Investors should not be permitted to bypass the basic purpose of the investment immigration program. The rules must be changed to ensure developers consider larger census blocks. Even supporters of the renewal acknowledged the need for ensuring that investments are made in rural and urban areas facing the problem of high unemployment.
- Establish common requirements under the program for the entire nation. Currently, local entities use their discretion to define high unemployment areas. A centralized approach will make it easier to prevent misuse of the program. It will also simplify the process of monitoring instances of fraud, violation of national security, and instances of inflow of illegal money.
- A recent book conducted by the office of Inspector General of the Department of Homeland Security discovered that it is virtually impossible to verify data related to jobs created as a result of EB-5 projects. Job creation data must be tracked in a uniform manner all over the nation.
- Increase the minimum investment required under the program. The $1 million requirement, determined in 1991, is equivalent to $1.8 million in 2015. Critics call for a tenfold increase in the minimum investment to ensure the program does not devalue the importance of residing in America.
- Increase the minimum job creation requirement. With most projects being developed in areas with booming economies, the requirement of creation of 10 jobs is being criticized for being too low. There are calls for imposing a minimum requirement of creation of 100 jobs. The program may have a lower limit for projects established in rural areas.
Source: SeattletimesGeneral Information: Contact us to receive more information about this article.
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