The EB-5 program has been under attack from a wave of bad press as of late. In the midst of the COVID-19 pandemic, there has been false rumors about President Trump making major changes to the EB-5 program, pressure from senators to suspend employment-based immigration, and the spouting of misinformation from multiple politicians regarding the EB-5 program.
Some of the most common myths used to argue against the EB-5 program are that it is “plagued by scandal and fraud” and that it is a “pay-for-citizenship” scheme. These claims could not be further from the truth.
Educating the U.S. public on the facts of the EB-5 program and how it works could help gain support for the program, which, in turn, could greatly benefit the U.S. economy.
Cases of Fraud in the EB-5 Program
The media and politicians often claim that the EB-5 program is filled with fraudulent cases. However, this is simply not true. The EB-5 program takes strong measures to prevent fraud. Recently, United States Citizenship and Immigration Services (USCIS) has increased its anti-fraud measures, and the Immigrant Investor Program Office (IPO) has begun extra training and cooperation with external agencies to prevent fraud.
While there have been cases of fraud in the EB-5 program before, the truth is that fraud is extremely rare. The fraud scandals just happen to be the only stories deemed newsworthy and picked up by the media. This creates a false image that the EB-5 program is overrun with fraud. In reality, the overwhelming majority of EB-5 investors are honest businessmen and women hoping to develop businesses in the U.S.
In addition to the anti-fraud measures, the EB-5 program requires every investor to document all sources of investment funds to ensure it was legally acquired. Investment capital that has been sourced from unlawful organizations cannot be used in the EB-5 program.
Paying for Citizenship
Multiple critics of the EB-5 program argue that it is simply a way for immigrants to purchase citizenship. A simple look at the requirements of the EB-5 program prove that this is not the case.
EB-5 investors are required to invest a minimum of $1.8 million, or $900,000 in a targeted employment area, which must remain at risk during the investment period. This requirement has resulted in some investors losing most or even all their investment. In addition to making the investment, investors must show that their investment will create 10 new full-time jobs for U.S. workers. Only the successful investors who have met these, and many more, requirements receive U.S. green cards.
The Contribution of EB-5 Investors
Individuals and families that participate in the EB-5 program are wealthy and successful. These entrepreneurs bring their valuable capital and businesses to the United States, which creates new jobs for U.S. workers and boosts the economy. They also contribute to the economy outside of the EB-5 program by spending their income and capital within their communities.
The EB-5 Modernization Rule, which was introduced in November 2019, funnels EB-5 capital into the areas that need it the most, with a focus on creating much-needed jobs. This is one more measure taken to ensure that the EB-5 program helps the economy the way it was intended to.
Why EB-5 Deserves Support
If the EB-5 program is supported and allowed to function the way it was intended, it could reap great benefits for the U.S. economy. The U.S. government should be working to promote the program and attract new investors willing to invest their capital in the U.S. With the potential to create countless jobs, the EB-5 program could be exactly what the United States needs following the turmoil of the COVID-19 pandemic.