The EB-5 visa program, created in 1990, encourages foreign investment that stimulates U.S. job growth, while providing an opportunity for foreign nationals to become lawful permanent residents.
As of 2012, the EB-5 visa program has created over 42,000 jobs and brought in more than $3.39 Billion for the United States economy. The government administration of the program is fully funded through the fees that the individual investors pay, and each immigrant investor creates 10 full time U.S. jobs with their investment. Moreover, EB-5 is the only federal job creation program that creates jobs at zero cost to the U.S. taxpayer. Compare this to the American Recovery and Reinvestment Act of 2009 (i.e., The Stimulus Bill) which cost U.S. taxpayers over $750B. According to the 2012 report issued by the Congressional Budget Office, this puts the cost per job at anywhere between $540,000 and $4.1 Million.
Yet, despite the efficiency EB-5 brings to U.S. job creation, the media and some of our elected officials continue to portray it as an example of the immigration system gone wrong. Note, for example, the recent report on Homeland Security from Senator Tom Coburn.
Let’s keep things in perspective. Every year, 366,000 visas are allotted for immigrants to legally enter the United States. EB-5 accounts for 10,000 of those visas, or 3%. If issues related to EB-5 are the biggest problem that our elected officials can find, then it seems our current immigration system is probably working just fine. Obviously, this is not the case.
The Migration Policy Institute estimates that there are over 11 million illegal immigrants currently living in our country. In addition, according to the Colorado Alliance for Immigration Reform, as many as 700,000 people enter the country illegally each year. In one week alone, there are more illegal immigrants entering the country than the entire yearly allocation for EB-5 visas. And, unlike EB-5 which creates jobs at no cost to the U.S. taxpayer, according to a report done by the Federation for American Immigration Reform, illegal immigration costs the taxpayer about $113 Billion per year.
I cite these statistics not to suggest that the EB-5 program is without issues or that these issues do not need to be resolved. Instead, I do it to point out that as a U.S. taxpayer, I would prefer that our elected officials focus on increasing availability of the things that create jobs – like EB-5 – and getting better controls on the things that cost us money – like illegal immigration.
When it comes down to it, the EB-5 program isn’t perfect – no visa program is. In his report, Senator Coburn points out some of the potential concerns, which should be noted are not exclusive to EB-5 and can be equally applied to many other immigration categories. The EB-5 visa program has grown substantially since 2010, not just in numbers, but also in how the industry regulates itself. Industry associations have formed, best practices are being promoted, and education programs are in full force. To their credit (and perhaps unprecedented in today’s political environment) the USCIS and the SEC are working closely together to ensure that fraud is eliminated and the laws are being followed and enforced. In the principal case cited by Senator Coburn in his report, the fraud was stopped and every investor received a full return of their capital.
NES Financial was founded on the principles of bringing security, transparency, and compliance to highly specialized financial transactions in order to protect stakeholders by eliminating fraud and abuse. As the largest financial services provider in the EB-5 industry, our suite of EB-5 Solutions has helped more than 250 issuers uphold these same principles throughout their business processes and allowed them to deliver such to investors.
The EB-5 visa program provides many benefits. It is a great thing for investors who want to pursue the American dream, for American citizens in need of jobs, and for U.S. taxpayers. Our media and government officials should stop talking about eliminating or reducing the program and should focus on how to properly expand it.
NES Financial welcomes your questions and opinions. Allow us to address your business needs by contacting us. We look forward to hearing from you!