In a new report, the Bipartisan Policy Center weighed in on the current discussion surrounding the immigrant investor program, known as EB-5, making a case for why the program has provided positive benefits and could continue to do so in the future. The report, EB-5 Program: Successes, Challenges, and Opportunities for States and Localities, looks at government data and independent studies of the program and provides an overview of the program, its performance and impact. The EB-5 program was first created in 1990 to stimulate job growth and capital investment. It is the only visa program for investors that leads to permanent residence, and it requires that applicants invest $1 million (or $500,000 if the investment is in a rural or high-unemployment area) and create at least ten jobs.

As the report describes, in 1993, Congress created the “Regional Center Program” which allows investors an opportunity to channel their investments into entities that pool investments to fund projects in a particular geographic area. Today, the vast majority (97 percent last year) of EB-5 visas stem from investments made through the Regional Center Program.

Although each year since its inception, there have been 10,000 visas allotted from the EB-5 program, for the first 15 years, only a very small fraction of the visas were used. However, following the banking crisis and recession of 2007 and 2008, some looked more to foreign investments. The number of regional centers grew from 74 in 2009 to 697 in 2015, and the number of visas issued to investors grew as well, from 1,360 in 2008 to 10,692 in 2014. Overall, 44,427 visas have been issued through the EB-5 program.

Four key takeaways from the report include:

  1. The program has attracted billions of dollars of investments and created thousands of jobs. According to the Bipartisan Policy Center, the program has attracted at least $4.2 billion. But, the report also notes that less conservative methodologies have put the estimate investment as much higher, in the $11-12 billion range.
  2. It has been difficult to assess the full impact of the program. More can be done to collect and make available data regarding EB-5 projects, in order to assess the full value of the program.
  3. States and localities have increasingly taken interest in the attracting EB-5 investments. Many states and localities have created partnerships with regional centers or even created their own because they see an opportunity for economic growth. Moreover, the program’s regional focus “presents valuable opportunities for state and local leaders to address some of their public-spending projects, including in highly underinvested but critical public infrastructure and affordable housing.”
  4. With changes, the EB-5 program has potential to support regional economic development. Although the program’s relatively small size means it will never be a primary solution to the United States’ economic needs, it can provide meaningful opportunities for development at the regional level.

The report also points out some of the challenges facing the EB-5 program. As the report summarizes:

“The unique nature of the program, in which the motivation behind investment is principally migration, can leave the both the program and individual foreign investors susceptible to fraudulent schemes by bad regional center actors or middlemen. USCIS’s qualifications for overseeing financial-investment projects have also been called into question. Lastly, a lack of publicly available data, clear tracking of economic impacts, and USCIS’s statutory limitations on oversight have raised some security concerns and make it difficult for government and non-government entities to assess the overall economic impact of the program.”

USCIS has taken some steps to strengthen the utility and integrity of the program, and more potential reforms have been recommended through both government entities and through current legislation in Congress.”

The immigration agency has undertaken some administrative reforms, and other reforms, both administrative and legislative, have been recommended. With now less than two weeks until the September 30 expiration of the EB-5, many are waiting to see what Congress will do. Will lawmakers reauthorize the program as is or with some changes to the program to address concerns raised above? Will they let the program sunset? Or, will they reauthorize it for just a short period of time, pushing off a discussion on the program until later this year? In the coming days, the answer will emerge, but in the meantime, the Bipartisan Policy Center report is a contribution to the continued to debate about the merits of the EB-5 program.

Photo by Simon Cunningham.