By 
As the United States, along with the rest of the world, attempts to get a handle on the spread of COVID-19, the U.S. government is scrambling to find ways to get the U.S. economy back up and running. Unfortunately, the U.S. government consistently fails to recognize the economic benefits of the EB-5 program. Being an employment-based immigration program that creates jobs for U.S. workers, the EB-5 Immigrant Investor Program could be the jump start that the U.S. economy desperately needs following COVID-19.
The state of the EB-5 program continues to be threatened as immigration policy is debated. President Trump signed an executive order on April 22 that suspended immigration into the U.S. for 60 days. While EB-5 investors were excluded from this immigration ban, there has been much discussion in the media and government that is not in support of the EB-5 program, such as false rumors of changes to the EB-5 program and a letter from senators encouraging Trump to extend the immigration suspension to EB-5 investors.
While there haven’t been any substantial actions taken against the EB-5 program yet, the unpredictable circumstances resulting from the COVID-19 pandemic could allow the U.S government to create obstacles for the EB-5 program. However, this could also be the perfect time for the U.S. government to promote the program and its economic benefits. The EB-5 program was created by Congress in 1990 specifically to stimulate the U.S. economy. It is regrettable that the U.S. government fails to recognize the benefits that the EB-5 program could offer the United States during the aftermath of COVID-19.
Lack of Political Support
One of the largest challenges that the EB-5 program faces is the lack of political support from both ends of the spectrum. Most politicians find it easier to stick to the same conventional talking points instead of promoting the objective facts regarding the EB-5 program’s job-creation potential. Republicans prefer to only discuss the negative points of immigration, and the Democrats continue to move further away from the interests of businesses. This leaves the EB-5 program unable to fit into either party’s narrow platform.
The COVID-19 pandemic has left the U.S. economy in shambles as many businesses remain permanently closed and thousands of U.S. workers are left without jobs. The EB-5 program could help struggling businesses survive and create new jobs for unemployed Americans. The program would simultaneously bring successful foreign investors into the country who would be spending their income and tax dollars in the United States. The potential for saving businesses, boosting economic recovery, and helping unemployed U.S. workers is great for both Republicans and Democrats. Sadly, both parties fail to see these benefits.
The EB-5’s Poor Public Reputation
Due to poor media coverage, the EB-5 program does not have the most positive public image. While the vast majority of EB-5 investments are successful, the only newsworthy stories are the fraudulent scandals that make headlines across the nation. This leads the media and general public to associate EB-5 with fraud, even though EB-5 fraud is extremely rare. Government officials then pile onto the poor press in an attempt to maintain popularity with the general public.
To combat the bad press and poor reputation of the EB-5 program, the industry must promote good press and educate the public on the program. If the U.S. public understood that the program required each investor to create at least 10 new full-time jobs for U.S. workers, they could begin to understand the economic benefits of the EB-5 program. The public needs to be informed that the minimum investment for each applicant must be at least $1.8 million, or $900,000 in a targeted employment area (TEA). Understanding these facts would help the U.S. public see the economic potential of the EB-5 program, which would lead to more support for EB-5.
The IPO’s Shortcomings
Along with the U.S. government and media creating obstacles for the EB-5 program, the Immigrant Investor Processing Office (IPO) continues to hinder progress as well. The IPO oversees the EB-5 program and is responsible for processing new applications. For the program to create any economic stimulation, it must be run efficiently. I-924 petitions need to be processed much faster than they currently are to establish new regional centers and new EB-5 projects.
Furthermore, the processing of I-526 petitions must be accelerated to ensure EB-5 investors do not withdraw from discouragement.
Currently, the IPO can take up to four to six years to process I-924 petitions and up to three years for I-526 petitions. The recent EB-5 regional center terminations have also hurt the program’s potential to assist with economic recovery. The IPO has been closing regional centers that do not maintain a strong investment pipeline and consistent activity. This leads to the disproportionate closing of regional centers in rural and high-unemployment areas and investors from generating jobs and capital in the areas that need it the most.
EB-5 Deserves a Better Image
The EB-5 program has the potential to significantly assist with the recovery of the U.S. economy. However, the shortcomings of the media, government officials, and the IPO are hampering the program’s effectiveness. Due to the shortcomings of the current EB-5 program, many investors have opted to obtain immigrant investor visas in Canada, Australia, and other countries, preventing those investors from investing their capital in the United States. Major changes must be made to allow the EB-5 program to help the U.S. economy the way it was intended to.
Improvements to the program’s public image and an increase in political support is the way to a better EB-5 program. EB-5 users can help by signing IIUSA’s open letter to Congress.
