The US investment immigration program, the EB-5 visa, is a small program that contributes less than 2% of the total number of immigrants entering the United States each year. Around 4000 families gain the right to live in the USA through this program.
Reducing Application Backlogs is Vital to the Integrity of US EB-5 Visa Program
Yet, this program, allowing affluent individuals to obtain the US Green Card through investment of $500,000 or $1 million in commercial enterprises, affects a large number of individuals in and outside the USA in different ways. This is the reason why the program remains under the spotlight and why lawmakers were forced to opt for a third short-term deadline extension till 30th September, 2016.
However, such short extensions ignore the biggest problem that EB-5 applicants currently face. With an annual cap of 10,000 visas and very high demand, applicants are facing a six-year waiting period before becoming eligible for the conditional green card under the program. Unless future reforms provide for the retrogression problem and tackle pendency of applications, the program is unlikely to remain popular or effective for long in the future.
Since the 10,000-visa cap includes family members and dependents, around 3,500 to 4,000 applicants end up acquiring the right to live and work in the USA every year. Currently, there are approximately 19,000-20,000 investors waiting for their applications to be processed.
This huge backlog of US EB-5 Visa Program grew primarily due to two reasons. One, the EB-5 program became a preferred financing option for property developers. Affluent investors enjoy the double benefits of acquiring the green card and investing in an urban center in the country through the Regional Center program.
Two, proposed bills in the Congress before the last extension sought to increase investment requirement under Regional Centers to $800,000. This led to a rush to apply before the new rules came into force.
The backlog is likely to increase in the future as demand continues to grow even as the quota cap remains the same. The biggest challenge the program now faces is program integrity. Applicants may decide against investing $500,000 in a commercial enterprise in a foreign country and with a waiting period of 5-6 years (and growing) for a conditional green card.
With countries like the UK, Australia, and Portugal offering a faster pathway to permanent residence with no significant disadvantage, investors may well choose to opt for alternate programs in the future.
Such a shift is likely to hurt job creation in the country, which is one of the primary goals of the EB-5 program. Therefore, any real reform of the program must also focus on reducing program delays as this will help ensure its future viability in a competitive industry.
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