COVID-19 is here and is determined to continue upending our lives for at least another few months. The novel coronavirus has not skipped the United States as it travels the world, and cases have built up quickly in states such as New York, California, Michigan, and Louisiana. Schools and businesses alike are closed, and millions of workers across the country have lost their jobs. Against this backdrop, a false rumor about the Trump administration thinking about offering an increased number of EB-5 visas to foreign investors for a reduced price is believable—but it’s not true.
In 1990, Congress got together and created the EB-5 Immigrant Investor Program, meant as a way to encourage foreign nationals to invest in new U.S. enterprises. In exchange for their investment, the foreign nationals would be granted permanent residence and could live the American dream.
However, EB-5 visas are limited. Only about 10,000 are available per fiscal year, with investors typically claiming multiple visas to cover their spouse and unmarried children younger than 21. EB-5 investors typically foster in-need areas, such as high-unemployment or rural areas, due to targeted employment area (TEA) designation, as EB-5 projects in a TEA qualify for the lower minimum investment amount of $900,000 (half of the regular amount of $1.8 million). Previously, investors only needed to invest $500,000 or $1 million, but with the EB-5 Modernization Rule in November 2019 came the EB-5 program’s first-ever increase of the minimum investment amounts.
In the false rumor the EB-5 program has found itself embroiled in, Senator Lindsey Graham (R-SC) is said to be pushing for sweeping changes to the EB-5 program as a means of much-needed economic relief. However, Graham’s unequivocal denial of the claims leaves no room for doubt—for now, the EB-5 program will remain unchanged.
What is true is that the EB-5 program has a unique power to stimulate the U.S. economy. It proved a major boon during the 2008 recession, when project developers found themselves unable to attain traditional loans from banking institutes. They flocked to the EB-5 program in record numbers, and the capital of EB-5 investors around the world added an estimated $37.2 billion to the U.S. economy. The program also helped fight the unemployment created by the recession, spurring the creation of approximately 276,000 new full-time jobs between FY2010 and FY2015. An extra $5 billion in tax revenues can also be attributed to the EB-5 program.
Although the rumors are false, the EB-5 program’s focus on TEA projects does position it well to aid in the economic relief response following the COVID-19 pandemic. The majority of EB-5 investors invest in EB-5 projects with TEA designation, creating jobs and boosting local economies in the areas where economic stimulation is most needed. As long as investors create the necessary 10 full-time jobs and make sure their capital is at risk until they remove the conditions from their permanent resident status, they can receive a green card, and the U.S. economy can benefit. Ultimately, the EB-5 program won’t need aid from the government to help stimulate the post-coronavirus economy.