Learn about the EB-5 Program's history. Congress established the EB-5 Immigrant Investor Program (The fifth employment based visa category) as part of the Immigration Act of 1990.
Before learning about the EB-5 Program's history, find out what the EB-5 Program is.
The EB-5 Program gives foreign investors the opportunity to obtain a green card for themselves plus their immediate family members in return for investing in an American new commercial enterprise. Congress developed the EB-5 Program with the goal of boosting the U.S. economy and creating jobs for qualified U.S. workers.
With the success of the Program, Congress added the Immigrant Investor Pilot Program ("Pilot Program") in 1992, which established the Regional Center Program. Regional Centers are business entities that receive USCIS designation to pool capital from multiple foreign investors for investments in EB-5 projects.
In the early 1990's, cases of fraud were discovered, prompting reforms of the EB-5 Program. In 1998, USCIS required 3 major changes:
1. That EB-5 investors provide proof that the source of investment funds came from lawful sources;
2.That there were no longer any guaranteed returns on the investments (they must be at-risk); and,
3. That the EB-5 investor was involved in their investment project.
USCIS wanted to retroactively apply these reforms to older cases, however, in the case of Chang v. U.S. this practice was ruled illegal.
The Administrative Appeals Office, a unit of USCIS, issued and applied these new regulations to every EB-5 application.
Other precedent court cases that transformed the way USCIS processed EB-5 applications include Matter of Ho, Matter of Hsiung, Matter of Izummi, and Matter of Soffici.
- These cases established: the guidelines for proper and comprehensive business plans that are EB-5 Program compliant, the requirements that establish what constitutes lawful source of funds, the requirements that determine what is an "at-risk" investment, and the types of commercial entities that can receive EB-5 capital investments and how they must be administered.
In 2003, Congress created the Basic Pilot Program Extension and Expansion Act, which forced the Government Accounting Office to conduct an investigation into the EB-5 Program. This investigation prompted new reforms to be passed because it was discovered that only a small percentage of the 10,000 visas allocated for the EB-5 Program were being granted.
In 2005, in response to this discovery, a unit in USICS was established, called the Investor and Regional Center Unit, to take charge of overseeing the program and more specifically: field guidance, case auditing, regulation development, training in Regional Center adjudication, and policy creation.
The EB-5 Program was been consistently reauthorized by President Obama. Although many Senators are calling for reforms of the EB-5 Program, the program has been extended until September 2016, without changes.
Many changes and reforms continue to be made to the EB-5 Program. For example, although reforms have been passed, attempting to clarify matters such as the EB-5 job-creation requirements, the issue is still somewhat vague.