US senators have introduced legislation to renew the EB-5 regional center program that is set to expire in September 2015. The scheme is particularly popular among Chinese citizens, as it provides a pathway to US residence in exchange for investment in American businesses.
In many instances, “the program has helped combat a stagnant economy”, says Republican Senator Chuck Grassley of Iowa. “At the same time, though, we’ve seen too many occasions where national security has been put at risk and job creation has taken a back seat.”
The American Job Creation and Investment Promotion Reform Act would renew the EB-5 regional center program for another five years, while also providing investors with greater protection and giving US authorities greater powers to close down regional center programs or visas when fraud or criminal activity is detected. The Act would also ensure that more investment would be directed towards rural areas and areas with high unemployment.
Introduced in 1993, the EB-5 regional center program allows foreign nationals to invest in development projects proposed by public and private entities. The scheme requires an investment of a $500,000 in a business that creates a minimum of 10 jobs, for which the foreign investor is granted a conditional residence green card.
According to the US Citizenship and Immigration Services, about 10,000 EB-5 visas are issued each year through investments made at 676 regional centers throughout the country.
Democrat Senator Patrick Leahy of Vermont says that over the last two decades, the EB-5 program has provided access to funding and created jobs in Vermont as well as all across the US, with the program allowing the funding of major projects like the Hudson Yards in New York and the Hunters Point Shipyard in San Francisco.
The EB-5 program is especially popular with Chinese investors, with 85 per cent of EB-5 investors in 2014 being from China. Critics say the EB-5 visa has become a path way for wealthy Chinese citizens to buy permanent residence in the USA and bring their family members into the country.
In response to the high level of Chinese interest, the US government has announced it would slow down Chinese EB-5 application processing times (and create artificial delays), in an effort to reduce the disproportionate number of EB-5 visas being given to Chinese recipients. While caps limit the number of citizens from each country who can apply for EB-5 visas, the scheme is so popular in China that they have always managed to exceed the cap.
Source: nbcnews.com