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ILW.COM EB-5 Blog

EB-5 Visa: An Unlikely Economic Savior?

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In the recent fiscal crunch as many domestic methods of raising capital and reviving the
economy prove to be inadequate, a relatively unknown investment visa program is
rapidly gaining attention both nationally and globally.


Employment-Based Immigration: Fifth Preference, more commonly known as "EB-5" visa, was
established by the Congress as part of the Immigration Act of 1990 in order to
strengthen the economy by creating jobs and bringing capital into the country
from foreigners. The EB-5 visa hasn't been used to its full potential mostly
because of the lengthy and somewhat complicated application process,
additionally there are widespread misconceptions that stem from limited
marketing of the program.


However, the recent years have seen an upsurge in the number of EB-5 visas issued by the
State Department. According to CNNMoney, the U.S. government is estimated to
grant more than 6,000 EB-5 visas this year, setting a record and surpassing the
number of visa that were issued last year. The limit of immigrant investor
visas that can be issued per year is 10,000.


Clem Turner, an EB-5 corporate and securities attorney at Homeier & Law's New York
location, has been advising several Regional Centers and businesses throughout
his career and regularly speaks at EB-5 conferences all over the country.
Turner says that the EB-5 visa is better than other employment-based visas in terms
of stimulating the economy because it is directly tied to creating jobs and
providing capital to U.S. businesses.


Despite the great potential the EB-5 has to offer to the nation's economy, the program
hasn't been embraced wholeheartedly. Its critics claim that the program is
failing because it doesn't do much to help revive the economy. Turner believes
that the negative publicity comes from a "few bad actors who aren't abiding by
the guidelines." He also cites "a fundamental misunderstanding of the program"
as a reason for its unpopularity.


"The EB-5 program has actually raised between $2.5 billion to $3.5 billion for U.S.
companies that are pledging to create thousands and thousands of jobs for U.S.
workers," he said. "Some of these projects take time to develop, for instance
it takes time to build a hotel or add a new division to a manufacturing
company. Investments today mean a new job creating facility will be working two
or maybe five years from now. I think people need to be a little more patient
with respect to getting the benefits to our economy out of the EB-5 program"


 One of the most rewarding aspect of the program is that it doesn't use the American
taxpayer's money to recover the economy. Instead, it increases tax revenue by
bringing individuals of high net worth into the country's tax rolls, while
creating businesses that will generate additional tax revenues for their
respective neighborhoods. The influx of foreign investors will also bolster the
housing market, with almost 9 percent of the total home purchases in the
U.S in the last year being made by foreigners.


 The EB-5 programs grants temporary visas to applicants who invest half a million dollars
in a rural or high unemployment areas -- known as Targeted Employment Area --
or $1 million in an economically sound area, in a new or recently created,
federally approved business. Applicants can also invest money into USCIS
designated Regional Centers, public or private economic units that create jobs
and develop programs for economic growth. 
If the business generates or maintains a minimum of 10 jobs within two
years, the investors and their families qualify for permanent U.S. residency.


 

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