EB-5 Sunset Provision Unsettles Investors and Entrepreneurs
The EB-5 Regional Center Investor Program will sunset on September 30, 2012. Congress is expected to reauthorize the program, but we could be waiting until the end of September before a vote on the issue. This will certainly unsettle potential foreign investors who would like to invest in an EB-5 project now, as well as entrepreneurs seeking certification of new projects by United States Citizenship and Immigration Services (USCIS). USCIS administers the Immigrant Investor Program. Created by Congress in 1990, the EB-5 program was intended to stimulate the U.S. economy through job creation and capital investment by foreign investors. Under a pilot immigration program first enacted in 1992 and regularly reauthorized since and as recently as 2009, certain EB-5 visas also are set aside for investors in Regional Centers designated by USCIS based on proposals for promoting economic growth.
The program has been a success and is clearly beneficial to the United States economy. The EB-5 program facilitates foreign investment in job-creating projects or businesses. A direct result is job creation. The Regional Center Pilot Program provides the tremendous legal benefit of a green card to a foreign investor who places $500,000 into a job-creating project in an area of the country that needs economic development. Under the Pilot Program, Regional Centers have sprouted across the United States to provide an infrastructure of support for EB-5 projects focused on activities ranging from hotel and resort development to constructing clinics and expanding health care and nursing facilities. These projects grow in Targeted Employment Areas (TEA), which are either rural parts of the country or sections of even large cities that are suffering from unemployment rates of at least 150% of the national average. Vibrant EB-5 programs have resulted in job creation in Vermont, New York, California, Washington and other states. This program will vanish if Congress fails to reauthorize it, leaving investors in a legal state of limbo.
EB-5 investments have put Americans back to work in sectors that had been especially hard hit by the recession. Construction and tourism are two examples. Acting now to extend the EB-5 Pilot Program needs to be high on the agenda of our elected legislative representatives. The possibility of Congress not renewing the EB-5 program, however remote, is unsettling enough to cause some investors to think twice about the United States. Recently, I spoke with investors from India and Iran who told me they feel more secure opting for a comparable investment-based immigration program in Canada. If Congress does not act more foreign investors will explore opportunity elsewhere.
We need Congress to act now to ensure continuity with the EB-5 Regional Center Pilot Program. American jobs are at stake. Delaying action sends the wrong message to foreign investors, who often wish to secure permanent residence to enable their children to pursue higher education and employment in the United States without the headaches that come with renewing visas. For every foreign investor who elects to build a life in the United States, we add ten jobs and a wealthy tax payer into our system. Reauthorizing the EB-5 program is a way for Congress to welcome immigrants while building and expanding the economy. And Congress should make the program permanent. This would give investors and entrepreneurs building EB-5 projects the secure legal grounding they need to move forward. I cannot think of a more American approach to aligning values of inclusiveness with our strong tradition of entrepreneurship and a free market.
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