The Immigrant Investor Program has become a reliable a source of funding for commercial enterprises in the U.S. in the last decade. Although many projects financed through this program involve small to medium-sized businesses, a number of major US-based international companies have recently gotten in on the action as well as the Great Recession has slowly dried up domestic sources of investment. Although a majority of foreign investment-fueled enterprises are located in small towns or outside metropolitan areas, a significant and growing number of the projects undertaken by these corporations are located in some of the biggest cities in the country, including Los Angeles and New York.
Congress created the Immigrant Investor Program in the early 1990s to promote job creation and economic development by offering foreign entrepreneurs the chance to apply for permanent residency visa, or green card, in exchange for their investment in domestic commercial enterprises. Depending on how much and where an immigrant entrepreneur invests, he or she can earn an EB-5 visa, which is the Employment-based fifth preference immigration visa. A foreign national can invest either $500,000 in a commercial enterprise that is located in a rural or high-unemployment area (“Targeted Employment Areas”), or $1,000,000 anywhere else. If at the end of two years the investment has created and preserved 10 permanent full-time jobs, the foreign investor is granted an investment visa. A conditional visa allowing a foreign investor immediate entry into the United States is given once an EB-5 application is approved (those conditions are removed, and a permanent visa is awarded, if the job creation requirements are met within two years).
The requirement of investing only $500,000 in commercial enterprises in small towns or economically hard-hit areas is a major incentive built by the Congress. The reduced amount of the minimum investment required helps to attract foreign investments in these areas to revive the local
Lately, a number of large businesses have turned to the EB-5 program to help finance projects in some of the country’s biggest cities. These companies often use the Regional Center route to raise money for domestic enterprises. Regional Centers are federally approved investment and development entities that can attract and manage investments from many different foreign entrepreneurs to help invest in large-scale commercial projects. In addition to being permitted to raise large amounts of money for commercial enterprises, Regional Centers can also fulfill the job creation requirements through indirect job creation. The hospitality industry has benefitted greatly from the EB-5 program. Hotels in particular have the potential to create dozens of jobs within the hotels themselves, and indirectly in other nearby businesses, such as shops or restaurants.
Some of the country’s largest hotel chains have taken advantage of the EB-5 Regional Center program to finance hotel construction in an otherwise challenging investment environment. Marriott, Hilton, Hyatt, and Starwood are just a few of the industry leaders that have dozens of projects in the pipeline or currently underway in several cities around the country, including Seattle, New York, Milwaukee and Los Angeles. These projects have or are expected to create hundreds, if not thousands, of jobs for hotel workers (desk staff, housekeepers, gift shop proprietors, etc.) and others in businesses located near the hotels, not to mention the hundreds of visas that will be granted to the investors themselves for their contributions. Millions of dollars are pouring into these projects from overseas, and that investment is contributing to economic recovery and growth throughout the country. Hotel executives acknowledge that much of this would be impossible in the current environment without the EB-5 program.