EB-5 visa program offers foreign investors quicker way to legal residence in the U.S. than many other visas. Under the EB-5 program, foreigners who invest as little as $500,000, or sometimes $1 million, in commercial enterprise projects that create 10 jobs for qualified U.S. workers, can apply for an EB-5 green card.
Over 80% of the foreign investors are from mainland China. These investors have invested billions of dollars in office buildings, condominium projects, hotels, and public and private works projects.
The EB-5 program interests many middleclass Chinese who are looking to move to the U.S. for either a change of lifestyle or better schooling opportunities for their children. The spouse and unmarried children under 21 of the EB-5 visa holder receive the same legal residential benefits.
The most difficult part for investors seeking to attain the EB-5 visa is showing proof of funds. See: "Problems With Sources Of Funds".
Big commercial enterprise developers often sign up EB-5 investors to their projects.
- Foreign investors collectively put hundreds of millions of dollars into these large projects. This is a major source of funding for developers who take advantage of the fact that many foreign investors are more interested in securing an EB-5 green card and less concerned with the interest they receive on their investments. They often receive less than 1% return on their investments.
- Before the creation of the EB-5 program, many developers would have taken out loans, which would have caused them to have to pay as much as 12% interest. Whereas, now, with EB-5 funding, they can pay as little as 5% interest.
Again, investors must due their research into the projects. Many developers promise returns on their investments and begin construction on projects, but take the money before the project is finished.
One criticism of the EB-5 program is the location of the projects. EB-5 projects are supposed to be located in areas either rural areas or areas of high-unemployment. However, foreign investors are taking their $500,000 funds and successfully investing in wealthy areas of New York City. Developers are using census tracts to find areas in New York City that are technically high unemployment areas. This also happens in Miami, Florida.
The EB-5 program is up for renewal and Congress may make curtail using contiguous census tracts. They may make more EB-5 visas available. Currently, the 10,000 visas allotted are going fast. Additionally, they may raise the $500,000 minimum investment requirement.